0762.HK · HKG · Communication Services
China Unicom (Hong Kong) Limited
Also onConsensus Drift
Implied value per share
HKD 14.80
Market price
HKD 5.73
Implied upside
+158.3%
5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · CNY model at 1.1708
Current EV/EBITDA of 1.4x sits outside a defensible 3-20x band, so the exit multiple is capped at 3.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.
Value Per Share
Same forecast, different terminal treatment. Percentages vs price.
Forecast Cashflows
Reporting currency (CNY). Outflows negative.
| Line | FY26 | FY27 | FY28 | FY29 | FY30 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | CNY 405.5bn | CNY 419.2bn | CNY 433.4bn | CNY 448.1bn | CNY 463.3bn | +3.4% |
| EBIT | CNY 25.5bn | CNY 26.3bn | CNY 27.2bn | CNY 28.1bn | CNY 29.1bn | +3.4% |
| NOPAT | CNY 21.3bn | CNY 22.0bn | CNY 22.7bn | CNY 23.5bn | CNY 24.3bn | +3.4% |
| Add depreciation & amortisation | CNY 90.5bn | CNY 93.5bn | CNY 96.7bn | CNY 100.0bn | CNY 103.4bn | +3.4% |
| Less capital expenditure | CNY -79.5bn | CNY -82.2bn | CNY -85.0bn | CNY -87.8bn | CNY -90.8bn | +3.4% |
| Less increase in working capital | CNY -10.9bn | CNY -11.3bn | CNY -11.6bn | CNY -12.0bn | CNY -12.4bn | +3.4% |
| Free cashflow to firm | CNY 21.4bn | CNY 22.1bn | CNY 22.8bn | CNY 23.6bn | CNY 24.4bn | +3.4% |
| Discount factor | 0.9662 | 0.9020 | 0.8420 | 0.7860 | 0.7338 | - |
| Present value | CNY 20.6bn | CNY 19.9bn | CNY 19.2bn | CNY 18.6bn | CNY 17.9bn | -3.5% |
| Present Value Of The Forecast | CNY 96.3bn | |||||
Discount Rate
Source shown per component. All overridable above.
| Risk-free rate | 3.20% | HKD assumption - no free live source available for this market (assumption) |
| Equity risk premium | 7.00% | Market assumption |
| Beta | 0.677 | Reported 0.518, pulled toward 1.0 (Blume) |
| Cost of equity | 7.94% | Risk-free + beta x equity risk premium |
| Cost of debt | 3.48% | Interest expense / average total debt |
| Market capitalisation | CNY 175.3bn | 83.7% of capital |
| Total debt | CNY 34.1bn | 16.3% of capital, book value as a proxy |
| Tax rate | 16.5% | Effective, capped at statutory |
| WACC | 7.12% | 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%
73% of EV
- Forecast FCFF, final year
- CNY 24.4bn
- Capex at depreciation, working capital in reinvestment
- CNY 24.3bn
- Less reinvestment at g/ROIC (35.1% of NOPAT)
- CNY -8.5bn
- Capitalised
- CNY 15.8bn
- ROIC (WACC floor)
- 7.1%
- Terminal value, undiscounted
- CNY 349.8bn
- Terminal value, discounted
- CNY 256.7bn
- Enterprise value
- CNY 352.9bn
- Less net debt
- CNY -33.8bn
- Equity value
- CNY 386.8bn
Exit at 3.0x EBITDA
75% of EV
- Terminal value, undiscounted
- CNY 397.4bn
- Terminal value, discounted
- CNY 291.6bn
- Enterprise value
- CNY 387.9bn
- Less net debt
- CNY -33.8bn
- Equity value
- CNY 421.7bn
Spread between methods: 9%.
Sensitivity
Value per share (CNY) by discount rate and long-run growth.
| Long-run growth | |||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
| 5.12% | 17.35 | 17.62 | 17.97 | 18.46 | 19.22 |
| 6.12% | 14.40 | 14.45 | 14.50 | 14.55 | 14.60 |
| 7.12% | 12.56 | 12.60 | 12.64 | 12.68 | 12.72 |
| 8.12% | 11.17 | 11.20 | 11.24 | 11.27 | 11.30 |
| 9.12% | 10.08 | 10.11 | 10.14 | 10.17 | 10.20 |
Outlined: this model. Green text: above today's price of 4.89. 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.
| Input | Model | Implied | Gap |
|---|---|---|---|
| EBIT margin | 6.3% | 2.1% | -4.2pp |
| Discount rate | 7.1% | 22.3% | +15.2pp |
Live formulas, not pasted numbers - edit a driver and the workbook reprices.
Yahoo Finance and RBA data. General information, not advice. Methodology.