DCF Studio

    0322.HK · HKG · Consumer Defensive

    Tingyi (Cayman Islands) Holding Corp.

    Also onConsensus Drift

    Implied value per share

    HKD 24.61

    Market price

    HKD 11.72

    Implied upside

    +109.9%

    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 24.61+109.9%
    Exit multiple
    HKD 12.79+9.2%
    Market price
    HKD 11.72

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCNY
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCNY 79.2bnCNY 79.3bnCNY 79.4bnCNY 79.5bnCNY 79.7bn+0.1%
    EBITCNY 5.0bnCNY 5.0bnCNY 5.0bnCNY 5.0bnCNY 5.0bn+0.1%
    NOPATCNY 4.2bnCNY 4.2bnCNY 4.2bnCNY 4.2bnCNY 4.2bn+0.1%
    Add depreciation & amortisationCNY 3.4bnCNY 3.4bnCNY 3.4bnCNY 3.5bnCNY 3.5bn+0.1%
    Less capital expenditureCNY -3.4bnCNY -3.4bnCNY -3.4bnCNY -3.4bnCNY -3.4bn+0.1%
    Less increase in working capitalCNY -12.4mCNY -12.5mCNY -12.5mCNY -12.5mCNY -12.5m+0.1%
    Free cashflow to firmCNY 4.2bnCNY 4.2bnCNY 4.2bnCNY 4.3bnCNY 4.3bn+0.1%
    Discount factor0.97440.92520.87840.83410.7919-
    Present valueCNY 4.1bnCNY 3.9bnCNY 3.7bnCNY 3.5bnCNY 3.4bn-4.9%
    Present Value Of The ForecastCNY 18.7bn

    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
    Beta0.390Reported 0.090, pulled toward 1.0 (Blume)
    Cost of equity5.93%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 66.1bn81.3% of capital
    Total debtCNY 15.2bn18.7% of capital, book value as a proxy
    Tax rate16.5%Effective, capped at statutory
    WACC5.32%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 21.02

    84% of EV

    Forecast FCFF, final year
    CNY 4.3bn
    Capex at depreciation, working capital in reinvestment
    CNY 4.2bn
    Less reinvestment at g/ROIC (16.5% of NOPAT)
    CNY -694.5m
    Capitalised
    CNY 3.5bn
    ROIC (reported)
    15.2%
    Terminal value, undiscounted
    CNY 128.0bn
    Terminal value, discounted
    CNY 101.4bn
    Enterprise value
    CNY 120.1bn
    Less net debt
    CNY 1.6bn
    Equity value
    CNY 118.5bn

    Exit at 6.6x EBITDA

    Value per shareCNY 10.93

    70% of EV

    Terminal value, undiscounted
    CNY 56.2bn
    Terminal value, discounted
    CNY 44.5bn
    Enterprise value
    CNY 63.2bn
    Less net debt
    CNY 1.6bn
    Equity value
    CNY 61.6bn

    Spread between methods: 63%.

    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%
    3.32%35.6346.4970.54169.40—
    4.32%23.1626.7132.1941.8063.10
    5.32%17.2218.8321.0224.1328.94
    6.32%13.7314.6015.6817.0918.99
    7.32%11.4411.9512.5613.3014.23

    Outlined: this model. Green text: above today's price of 10.01. 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 year0.1%-16.0%-16.2pp
    EBIT margin6.3%3.1%-3.3pp
    Discount rate5.3%8.6%+3.3pp
    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.