DCF Studio

    0291.HK · HKG · Consumer Defensive

    China Resources Beer (Holdings) Company Limited

    Also onConsensus Drift

    Implied value per share

    HKD 34.75

    Market price

    HKD 18.22

    Implied upside

    +90.7%

    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 34.75+90.7%
    Exit multiple
    HKD 22.71+24.6%
    Market price
    HKD 18.22

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn2bn5bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCNY
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCNY 38.9bnCNY 39.9bnCNY 40.9bnCNY 41.9bnCNY 43.0bn+2.5%
    EBITCNY 5.4bnCNY 5.6bnCNY 5.7bnCNY 5.9bnCNY 6.0bn+2.5%
    NOPATCNY 4.5bnCNY 4.7bnCNY 4.8bnCNY 4.9bnCNY 5.0bn+2.5%
    Add depreciation & amortisationCNY 2.2bnCNY 2.3bnCNY 2.3bnCNY 2.4bnCNY 2.4bn+2.5%
    Less capital expenditureCNY -2.3bnCNY -2.3bnCNY -2.4bnCNY -2.4bnCNY -2.5bn+2.5%
    Less increase in working capitalCNY -340.2mCNY -348.8mCNY -357.5mCNY -366.5mCNY -375.7m+2.5%
    Free cashflow to firmCNY 4.2bnCNY 4.3bnCNY 4.4bnCNY 4.5bnCNY 4.6bn+2.5%
    Discount factor0.96570.90070.84000.78340.7307-
    Present valueCNY 4.0bnCNY 3.8bnCNY 3.7bnCNY 3.5bnCNY 3.4bn-4.4%
    Present Value Of The ForecastCNY 18.4bn

    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
    Beta0.612Reported 0.421, pulled toward 1.0 (Blume)
    Cost of equity7.48%Risk-free + beta x equity risk premium
    Cost of debt3.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationCNY 59.1bn94.6% of capital
    Total debtCNY 3.4bn5.4% of capital, book value as a proxy
    Tax rate16.5%Effective, capped at statutory
    WACC7.22%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 29.68

    79% of EV

    Forecast FCFF, final year
    CNY 4.6bn
    Capex at depreciation, working capital in reinvestment
    CNY 5.5bn
    Less reinvestment at g/ROIC (18.8% of NOPAT)
    CNY -1.0bn
    Capitalised
    CNY 4.5bn
    ROIC (reported)
    13.3%
    Terminal value, undiscounted
    CNY 97.6bn
    Terminal value, discounted
    CNY 71.3bn
    Enterprise value
    CNY 89.7bn
    Less net debt
    CNY -6.6bn
    Equity value
    CNY 96.3bn

    Exit at 6.1x EBITDA

    Value per shareCNY 19.40

    67% of EV

    Terminal value, undiscounted
    CNY 52.0bn
    Terminal value, discounted
    CNY 38.0bn
    Enterprise value
    CNY 56.4bn
    Less net debt
    CNY -6.6bn
    Equity value
    CNY 62.9bn

    Spread between methods: 42%.

    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%
    5.22%40.8044.4749.4756.7068.09
    6.22%32.6334.5336.9240.0444.28
    7.22%27.3228.3929.6831.2633.26
    8.22%23.5924.2324.9725.8426.89
    9.22%20.8321.2221.6622.1622.75

    Outlined: this model. Green text: above today's price of 15.56. 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 year2.5%-16.5%-19.0pp
    EBIT margin14.0%6.4%-7.6pp
    Discount rate7.2%12.4%+5.2pp
    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.