DCF Studio

    6618.HK · HKG · Healthcare

    JD Health International Inc.

    Also onConsensus Drift

    Implied value per share

    HKD 27.90

    Market price

    HKD 36.28

    Implied upside

    -23.1%

    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.
    AdjustedCapital expenditure runs at 1.3% of revenue against depreciation of 0.4%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: HKD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    HKD 27.90-23.1%
    Exit multiple
    HKD 36.85+1.6%
    Market price
    HKD 36.28

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn2bn4bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCNY
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCNY 85.4bnCNY 99.3bnCNY 115.4bnCNY 134.2bnCNY 156.0bn+16.3%
    EBITCNY 1.9bnCNY 2.3bnCNY 2.6bnCNY 3.1bnCNY 3.6bn+16.3%
    NOPATCNY 1.6bnCNY 1.9bnCNY 2.2bnCNY 2.6bnCNY 3.0bn+16.3%
    Add depreciation & amortisationCNY 315.1mCNY 366.4mCNY 425.9mCNY 495.2mCNY 575.7m+16.3%
    Less capital expenditureCNY -1.1bnCNY -1.3bnCNY -1.5bnCNY -1.8bnCNY -2.1bn+16.3%
    Less increase in working capitalCNY 1.4bnCNY 1.6bnCNY 1.8bnCNY 2.1bnCNY 2.5bn-16.3%
    Free cashflow to firmCNY 2.2bnCNY 2.5bnCNY 2.9bnCNY 3.4bnCNY 4.0bn+16.3%
    Discount factor0.94920.85530.77070.69450.6258-
    Present valueCNY 2.1bnCNY 2.2bnCNY 2.3bnCNY 2.4bnCNY 2.5bn+4.8%
    Present Value Of The ForecastCNY 11.3bn

    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
    Beta1.118Reported 1.176, pulled toward 1.0 (Blume)
    Cost of equity11.03%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 115.7bn99.5% of capital
    Total debtCNY 636.0m0.5% of capital, book value as a proxy
    Tax rate16.5%Effective, capped at statutory
    WACC10.98%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 23.83

    61% of EV

    Forecast FCFF, final year
    CNY 4.0bn
    Capex at depreciation, working capital in reinvestment
    CNY 3.0bn
    Less reinvestment at g/ROIC (22.8% of NOPAT)
    CNY -676.0m
    Capitalised
    CNY 2.3bn
    ROIC (WACC floor)
    11.0%
    Terminal value, undiscounted
    CNY 27.7bn
    Terminal value, discounted
    CNY 17.3bn
    Enterprise value
    CNY 28.7bn
    Less net debt
    CNY -47.5bn
    Equity value
    CNY 76.2bn

    Exit at 16.2x EBITDA

    Value per shareCNY 31.47

    79% of EV

    Terminal value, undiscounted
    CNY 66.8bn
    Terminal value, discounted
    CNY 41.8bn
    Enterprise value
    CNY 53.1bn
    Less net debt
    CNY -47.5bn
    Equity value
    CNY 100.6bn

    Spread between methods: 28%.

    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%
    8.98%25.7125.7425.7825.8125.85
    9.98%24.6524.6824.7124.7424.77
    10.98%23.7823.8023.8323.8623.88
    11.98%23.0523.0823.1023.1223.15
    12.98%22.4422.4622.4822.5022.52

    Outlined: this model. Green text: above today's price of 30.99. 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 year16.3%29.3%+13.0pp
    EBIT margin2.3%4.3%+2.0pp
    Discount rate11.0%6.0%-4.9pp
    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.