DCF Studio

    6862.HK · HKG · Consumer Cyclical

    Haidilao International Holding Ltd.

    Also onConsensus Drift

    Implied value per share

    HKD 24.71

    Market price

    HKD 9.51

    Implied upside

    +160.0%

    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.
    AdjustedReported capital expenditure averages 2.84% of revenue against depreciation of 7.52%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 7.52% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.
    NoteRisk-free rate is an assumption: HKD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    HKD 24.71+160.0%
    Exit multiple
    HKD 20.87+119.5%
    Market price
    HKD 9.51

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn4bn8bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCNY
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCNY 48.3bnCNY 53.9bnCNY 60.2bnCNY 67.2bnCNY 75.1bn+11.7%
    EBITCNY 5.6bnCNY 6.3bnCNY 7.0bnCNY 7.8bnCNY 8.7bn+11.7%
    NOPATCNY 4.7bnCNY 5.2bnCNY 5.8bnCNY 6.5bnCNY 7.3bn+11.7%
    Add depreciation & amortisationCNY 3.7bnCNY 4.1bnCNY 4.6bnCNY 5.1bnCNY 5.7bn+11.7%
    Less capital expenditureCNY -3.6bnCNY -4.1bnCNY -4.5bnCNY -5.1bnCNY -5.6bn+11.7%
    Less increase in working capitalCNY 657.6mCNY 734.3mCNY 820.1mCNY 915.8mCNY 1.0bn-11.7%
    Free cashflow to firmCNY 5.4bnCNY 6.0bnCNY 6.7bnCNY 7.5bnCNY 8.4bn+11.7%
    Discount factor0.96090.88720.81910.75630.6983-
    Present valueCNY 5.2bnCNY 5.3bnCNY 5.5bnCNY 5.7bnCNY 5.8bn+3.1%
    Present Value Of The ForecastCNY 27.5bn

    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
    Beta0.812Reported 0.720, pulled toward 1.0 (Blume)
    Cost of equity8.89%Risk-free + beta x equity risk premium
    Cost of debt3.94%Interest expense / average total debt
    Market capitalisationCNY 51.5bn89.7% of capital
    Total debtCNY 5.9bn10.3% of capital, book value as a proxy
    Tax rate16.5%Effective, capped at statutory
    WACC8.31%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 21.11

    75% of EV

    Forecast FCFF, final year
    CNY 8.4bn
    Capex at depreciation, working capital in reinvestment
    CNY 7.3bn
    Less reinvestment at g/ROIC (7.4% of NOPAT)
    CNY -543.7m
    Capitalised
    CNY 6.8bn
    ROIC (reported)
    33.7%
    Terminal value, undiscounted
    CNY 119.6bn
    Terminal value, discounted
    CNY 83.5bn
    Enterprise value
    CNY 111.0bn
    Less net debt
    CNY -3.3bn
    Equity value
    CNY 114.3bn

    Exit at 6.5x EBITDA

    Value per shareCNY 17.82

    71% of EV

    Terminal value, undiscounted
    CNY 94.2bn
    Terminal value, discounted
    CNY 65.8bn
    Enterprise value
    CNY 93.2bn
    Less net debt
    CNY -3.3bn
    Equity value
    CNY 96.5bn

    Spread between methods: 17%.

    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%
    6.31%26.6428.8031.5235.0639.85
    7.31%22.2423.6025.2327.2529.78
    8.31%19.1320.0421.1122.3723.90
    9.31%16.8217.4618.1919.0420.03
    10.31%15.0315.4916.0216.6217.30

    Outlined: this model. Green text: above today's price of 8.12. 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 year11.7%-9.5%-21.1pp
    EBIT margin11.6%4.0%-7.6pp
    Discount rate8.3%19.2%+10.8pp
    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.