DCF Studio

    0285.HK · HKG · Technology

    BYD Electronic (International) Company Limited

    Also onConsensus Drift

    Implied value per share

    HKD 109.27

    Market price

    HKD 23.78

    Implied upside

    +359.5%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · CNY model at 1.1708

    AdjustedReports in CNY, trades in HKD. Modelled in CNY, converted at the end.
    NoteRisk-free rate is an assumption: HKD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    HKD 109.27+359.5%
    Exit multiple
    HKD 73.23+208.0%
    Market price
    HKD 23.78

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn8bn17bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCNY
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCNY 213.1bnCNY 253.1bnCNY 300.5bnCNY 356.9bnCNY 423.8bn+18.7%
    EBITCNY 4.8bnCNY 5.7bnCNY 6.7bnCNY 8.0bnCNY 9.5bn+18.7%
    NOPATCNY 4.3bnCNY 5.1bnCNY 6.0bnCNY 7.2bnCNY 8.5bn+18.7%
    Add depreciation & amortisationCNY 6.5bnCNY 7.7bnCNY 9.2bnCNY 10.9bnCNY 12.9bn+18.7%
    Less capital expenditureCNY -5.8bnCNY -6.9bnCNY -8.2bnCNY -9.7bnCNY -11.5bn+18.7%
    Less increase in working capitalCNY 3.4bnCNY 4.1bnCNY 4.8bnCNY 5.7bnCNY 6.8bn-18.7%
    Free cashflow to firmCNY 8.4bnCNY 10.0bnCNY 11.9bnCNY 14.1bnCNY 16.7bn+18.7%
    Discount factor0.97150.91700.86550.81690.7710-
    Present valueCNY 8.2bnCNY 9.2bnCNY 10.3bnCNY 11.5bnCNY 12.9bn+12.1%
    Present Value Of The ForecastCNY 52.0bn

    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
    Beta0.460Reported 0.194, pulled toward 1.0 (Blume)
    Cost of equity6.42%Risk-free + beta x equity risk premium
    Cost of debt3.47%Interest expense / average total debt
    Market capitalisationCNY 53.4bn85.7% of capital
    Total debtCNY 8.9bn14.3% of capital, book value as a proxy
    Tax rate10.2%Effective, capped at statutory
    WACC5.95%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 shareCNY 93.33

    74% of EV

    Forecast FCFF, final year
    CNY 16.7bn
    Capex at depreciation, working capital in reinvestment
    CNY 9.5bn
    Less reinvestment at g/ROIC (30.8% of NOPAT)
    CNY -2.9bn
    Capitalised
    CNY 6.6bn
    ROIC (reported)
    8.1%
    Terminal value, undiscounted
    CNY 195.9bn
    Terminal value, discounted
    CNY 151.1bn
    Enterprise value
    CNY 203.0bn
    Less net debt
    CNY -6.8bn
    Equity value
    CNY 209.8bn

    Exit at 4.7x EBITDA

    Value per shareCNY 62.55

    61% of EV

    Terminal value, undiscounted
    CNY 106.2bn
    Terminal value, discounted
    CNY 81.8bn
    Enterprise value
    CNY 133.8bn
    Less net debt
    CNY -6.8bn
    Equity value
    CNY 140.6bn

    Spread between methods: 39%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.95%147.63167.78201.68271.10494.88
    4.95%108.53115.61125.51140.37165.36
    5.95%86.8989.7393.3398.09104.71
    6.95%73.1074.2075.4977.0679.04
    7.95%63.5263.8064.0964.4164.76

    Outlined: this model. Green text: above today's price of 20.31. 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 year18.7%-12.1%-30.8pp
    EBIT margin2.2%-0.0%-2.3pp
    Discount rate5.9%31.8%+25.9pp
    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.