DCF Studio

    9961.HK · HKG · Consumer Cyclical

    Trip.com Group Limited

    Also onConsensus Drift

    Implied value per share

    HKD 3239.25

    Market price

    HKD 319.40

    Implied upside

    +914.2%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · CNY model at 1.1708

    Wrong toolThis model values the shares at 10.1x the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedReports in CNY, trades in HKD. Modelled in CNY, converted at the end.
    AdjustedBeta of -0.053 is not usable in a cost of equity. Clamped to 0.30.
    NoteRisk-free rate is an assumption: HKD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    HKD 3239.25+914.2%
    Exit multiple
    HKD 1791.09+460.8%
    Market price
    HKD 319.40

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn65bn131bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCNY
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCNY 91.1bnCNY 133.1bnCNY 194.4bnCNY 283.8bnCNY 414.5bn+46.0%
    EBITCNY 19.6bnCNY 28.6bnCNY 41.7bnCNY 60.9bnCNY 88.9bn+46.0%
    NOPATCNY 16.5bnCNY 24.0bnCNY 35.1bnCNY 51.3bnCNY 74.8bn+46.0%
    Add depreciation & amortisationCNY 2.9bnCNY 4.2bnCNY 6.1bnCNY 9.0bnCNY 13.1bn+46.0%
    Less capital expenditureCNY -1.4bnCNY -2.1bnCNY -3.0bnCNY -4.4bnCNY -6.5bn+46.0%
    Less increase in working capitalCNY 10.9bnCNY 15.9bnCNY 23.2bnCNY 33.8bnCNY 49.4bn-46.0%
    Free cashflow to firmCNY 28.8bnCNY 42.0bnCNY 61.4bnCNY 89.6bnCNY 130.9bn+46.0%
    Discount factor0.97620.93010.88630.84450.8047-
    Present valueCNY 28.1bnCNY 39.1bnCNY 54.4bnCNY 75.7bnCNY 105.3bn+39.2%
    Present Value Of The ForecastCNY 302.6bn

    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
    Beta0.300Clamped from a reported -0.053
    Cost of equity5.30%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 201.1bn86.4% of capital
    Total debtCNY 31.6bn13.6% of capital, book value as a proxy
    Tax rate15.9%Effective, capped at statutory
    WACC4.95%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 2766.70

    84% of EV

    Forecast FCFF, final year
    CNY 130.9bn
    Capex at depreciation, working capital in reinvestment
    CNY 76.9bn
    Less reinvestment at g/ROIC (38.7% of NOPAT)
    CNY -29.7bn
    Capitalised
    CNY 47.1bn
    ROIC (reported)
    6.5%
    Terminal value, undiscounted
    CNY 1975.0bn
    Terminal value, discounted
    CNY 1589.4bn
    Enterprise value
    CNY 1892.0bn
    Less net debt
    CNY -40.2bn
    Equity value
    CNY 1932.2bn

    Exit at 8.8x EBITDA

    Value per shareCNY 1529.80

    71% of EV

    Terminal value, undiscounted
    CNY 901.6bn
    Terminal value, discounted
    CNY 725.5bn
    Enterprise value
    CNY 1028.1bn
    Less net debt
    CNY -40.2bn
    Equity value
    CNY 1068.4bn

    Spread between methods: 58%.

    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%
    2.95%5724.367709.5714130.17——
    3.95%3450.893851.154523.295898.4410341.53
    4.95%2494.312608.532766.653002.503396.72
    5.95%1966.181993.172026.102067.972124.28
    6.95%1655.171661.021666.881672.741678.59

    Outlined: this model. Green text: above today's price of 272.80. 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 year46.0%-12.5%-58.5pp
    EBIT margin21.5%-0.3%-21.7pp
    Discount rate4.9%46.0%+41.1pp
    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.