DCF Studio

    2618.HK · HKG · Industrials

    JD Logistics, Inc.

    Also onConsensus Drift

    Implied value per share

    HKD 36.51

    Market price

    HKD 10.47

    Implied upside

    +248.7%

    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.

    Current EV/EBITDA of 3.0x 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

    Perpetuity growth
    HKD 36.51+248.7%
    Exit multiple
    HKD 32.76+212.9%
    Market price
    HKD 10.47

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn13bn25bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCNY
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCNY 252.9bnCNY 294.6bnCNY 343.2bnCNY 399.7bnCNY 465.6bn+16.5%
    EBITCNY 5.1bnCNY 5.9bnCNY 6.9bnCNY 8.1bnCNY 9.4bn+16.5%
    NOPATCNY 4.7bnCNY 5.5bnCNY 6.4bnCNY 7.4bnCNY 8.6bn+16.5%
    Add depreciation & amortisationCNY 17.4bnCNY 20.3bnCNY 23.7bnCNY 27.6bnCNY 32.1bn+16.5%
    Less capital expenditureCNY -8.6bnCNY -10.0bnCNY -11.6bnCNY -13.5bnCNY -15.7bn+16.5%
    Less increase in working capitalCNY 197.7mCNY 230.3mCNY 268.2mCNY 312.4mCNY 363.9m-16.5%
    Free cashflow to firmCNY 13.8bnCNY 16.1bnCNY 18.7bnCNY 21.8bnCNY 25.4bn+16.5%
    Discount factor0.96770.90610.84850.79460.7440-
    Present valueCNY 13.3bnCNY 14.6bnCNY 15.9bnCNY 17.3bnCNY 18.9bn+9.1%
    Present Value Of The ForecastCNY 80.0bn

    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
    Beta0.680Reported 0.523, pulled toward 1.0 (Blume)
    Cost of equity7.96%Risk-free + beta x equity risk premium
    Cost of debt3.75%Interest expense / average total debt
    Market capitalisationCNY 64.1bn74.1% of capital
    Total debtCNY 22.4bn25.9% of capital, book value as a proxy
    Tax rate8.1%Effective, capped at statutory
    WACC6.79%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 31.18

    59% of EV

    Forecast FCFF, final year
    CNY 25.4bn
    Capex at depreciation, working capital in reinvestment
    CNY 10.1bn
    Less reinvestment at g/ROIC (36.8% of NOPAT)
    CNY -3.7bn
    Capitalised
    CNY 6.4bn
    ROIC (WACC floor)
    6.8%
    Terminal value, undiscounted
    CNY 152.1bn
    Terminal value, discounted
    CNY 113.2bn
    Enterprise value
    CNY 193.1bn
    Less net debt
    CNY -6.6bn
    Equity value
    CNY 199.7bn

    Exit at 3.0x EBITDA

    Value per shareCNY 27.98

    54% of EV

    Terminal value, undiscounted
    CNY 124.6bn
    Terminal value, discounted
    CNY 92.7bn
    Enterprise value
    CNY 172.6bn
    Less net debt
    CNY -6.6bn
    Equity value
    CNY 179.2bn

    Spread between methods: 11%.

    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%
    4.79%43.9345.6748.1251.8958.48
    5.79%35.7136.0636.4837.0237.76
    6.79%31.0131.0931.1831.2731.35
    7.79%27.8327.9027.9728.0528.12
    8.79%25.3425.4125.4725.5325.59

    Outlined: this model. Green text: above today's price of 8.94. 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 year16.5%-16.8%-33.3pp
    EBIT margin2.0%-0.3%-2.3pp
    Discount rate6.8%36.8%+30.0pp
    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.