DCF Studio

    1113.HK · HKG · Real Estate

    CK Asset Holdings Limited

    Also onConsensus Drift

    Implied value per share

    HKD 50.53

    Market price

    HKD 46.18

    Implied upside

    +9.4%

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

    NoteRisk-free rate is an assumption: HKD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    HKD 50.53+9.4%
    Exit multiple
    HKD 59.99+29.9%
    Market price
    HKD 46.18

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (HKD). Outflows negative.

    0bn6bn12bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayHKD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueHKD 58.5bnHKD 59.0bnHKD 59.6bnHKD 60.1bnHKD 60.7bn+0.9%
    EBITHKD 14.1bnHKD 14.2bnHKD 14.4bnHKD 14.5bnHKD 14.6bn+0.9%
    NOPATHKD 12.2bnHKD 12.3bnHKD 12.5bnHKD 12.6bnHKD 12.7bn+0.9%
    Add depreciation & amortisationHKD 2.3bnHKD 2.3bnHKD 2.3bnHKD 2.4bnHKD 2.4bn+0.9%
    Less capital expenditureHKD -2.7bnHKD -2.8bnHKD -2.8bnHKD -2.8bnHKD -2.8bn+0.9%
    Less increase in working capitalHKD 192.4mHKD 194.2mHKD 196.0mHKD 197.9mHKD 199.7m-0.9%
    Free cashflow to firmHKD 12.0bnHKD 12.1bnHKD 12.2bnHKD 12.3bnHKD 12.4bn+0.9%
    Discount factor0.96720.90490.84650.79200.7409-
    Present valueHKD 11.6bnHKD 10.9bnHKD 10.3bnHKD 9.8bnHKD 9.2bn-5.6%
    Present Value Of The ForecastHKD 51.8bn

    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
    Beta0.724Reported 0.588, pulled toward 1.0 (Blume)
    Cost of equity8.27%Risk-free + beta x equity risk premium
    Cost of debt3.41%Interest expense / average total debt
    Market capitalisationHKD 161.6bn74.1% of capital
    Total debtHKD 56.6bn25.9% of capital, book value as a proxy
    Tax rate13.2%Effective, capped at statutory
    WACC6.89%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 50.53

    73% of EV

    Forecast FCFF, final year
    HKD 12.4bn
    Capex at depreciation, working capital in reinvestment
    HKD 12.7bn
    Less reinvestment at g/ROIC (36.3% of NOPAT)
    HKD -4.6bn
    Capitalised
    HKD 8.1bn
    ROIC (WACC floor)
    6.9%
    Terminal value, undiscounted
    HKD 188.8bn
    Terminal value, discounted
    HKD 139.9bn
    Enterprise value
    HKD 191.7bn
    Less net debt
    HKD 14.9bn
    Equity value
    HKD 176.9bn

    Exit at 13.7x EBITDA

    Value per shareHKD 59.99

    77% of EV

    Terminal value, undiscounted
    HKD 233.5bn
    Terminal value, discounted
    HKD 173.0bn
    Enterprise value
    HKD 224.8bn
    Less net debt
    HKD 14.9bn
    Equity value
    HKD 210.0bn

    Spread between methods: 17%.

    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%
    4.89%71.9672.2672.5672.8673.16
    5.89%59.2059.4459.6759.9160.15
    6.89%50.1450.3450.5350.7350.92
    7.89%43.3843.5543.7143.8744.04
    8.89%38.1538.2938.4338.5738.70

    Outlined: this model. Green text: above today's price of 46.18. 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 year0.9%-0.8%-1.7pp
    EBIT margin24.1%22.2%-1.9pp
    Discount rate6.9%7.5%+0.6pp
    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.