DCF Studio

    0016.HK · HKG · Real Estate

    Sun Hung Kai Properties Limited

    Also onConsensus Drift

    Implied value per share

    HKD 51.42

    Market price

    HKD 107.70

    Implied upside

    -52.3%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedOnly 3 year(s) of history available to anchor assumptions on.
    NoteRisk-free rate is an assumption: HKD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    HKD 51.42-52.3%
    Exit multiple
    HKD 78.62-27.0%
    Market price
    HKD 107.70

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (HKD). Outflows negative.

    0bn9bn18bnFY25FY26FY27FY28FY29
    Nominal FCFFDiscounted to todayHKD
    LineFY25FY26FY27FY28FY29CAGR
    RevenueHKD 68.6bnHKD 65.8bnHKD 63.1bnHKD 60.5bnHKD 58.0bn-4.1%
    EBITHKD 26.3bnHKD 25.3bnHKD 24.2bnHKD 23.2bnHKD 22.3bn-4.1%
    NOPATHKD 22.0bnHKD 21.1bnHKD 20.2bnHKD 19.4bnHKD 18.6bn-4.1%
    Add depreciation & amortisationHKD 3.4bnHKD 3.3bnHKD 3.2bnHKD 3.0bnHKD 2.9bn-4.1%
    Less capital expenditureHKD -4.1bnHKD -3.9bnHKD -3.8bnHKD -3.6bnHKD -3.5bn-4.1%
    Less increase in working capitalHKD -2.9bnHKD -2.8bnHKD -2.7bnHKD -2.6bnHKD -2.5bn-4.1%
    Free cashflow to firmHKD 18.4bnHKD 17.7bnHKD 16.9bnHKD 16.2bnHKD 15.6bn-4.1%
    Discount factor0.96470.89790.83560.77770.7238-
    Present valueHKD 17.8bnHKD 15.8bnHKD 14.1bnHKD 12.6bnHKD 11.3bn-10.7%
    Present Value Of The ForecastHKD 71.6bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.20%HKD assumption - no free live source available for this market (assumption)
    Equity risk premium7.00%Market assumption
    Beta0.890Reported 0.836, pulled toward 1.0 (Blume)
    Cost of equity9.43%Risk-free + beta x equity risk premium
    Cost of debt3.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationHKD 312.1bn70.6% of capital
    Total debtHKD 129.7bn29.4% of capital, book value as a proxy
    Tax rate16.5%Effective, capped at statutory
    WACC7.45%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareHKD 51.42

    73% of EV

    Forecast FCFF, final year
    HKD 15.6bn
    Capex at depreciation, working capital in reinvestment
    HKD 19.1bn
    Less reinvestment at g/ROIC (33.6% of NOPAT)
    HKD -6.4bn
    Capitalised
    HKD 12.7bn
    ROIC (WACC floor)
    7.4%
    Terminal value, undiscounted
    HKD 262.5bn
    Terminal value, discounted
    HKD 190.0bn
    Enterprise value
    HKD 261.7bn
    Less net debt
    HKD 112.7bn
    Equity value
    HKD 149.0bn

    Exit at 14.7x EBITDA

    Value per shareHKD 78.62

    79% of EV

    Terminal value, undiscounted
    HKD 371.4bn
    Terminal value, discounted
    HKD 268.9bn
    Enterprise value
    HKD 340.5bn
    Less net debt
    HKD 112.7bn
    Equity value
    HKD 227.8bn

    Spread between methods: 42%.

    Sensitivity

    Value per share (HKD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.45%83.5484.0284.4984.9785.44
    6.45%64.6164.9965.3865.7666.15
    7.45%50.7851.1051.4251.7452.06
    8.45%40.2440.5140.7841.0541.32
    9.45%31.9432.1832.4132.6432.87

    Outlined: this model. Green text: above today's price of 107.70. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year-4.1%5.1%+9.2pp
    EBIT margin38.4%61.5%+23.1pp
    Discount rate7.4%4.6%-2.9pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.