DCF Studio

    9992.HK · HKG · Consumer Cyclical

    Pop Mart International Group Limited

    Also onConsensus Drift

    Implied value per share

    HKD 130.87

    Market price

    HKD 155.10

    Implied upside

    -15.6%

    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 38.8x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    HKD 130.87-15.6%
    Exit multiple
    HKD 320.21+106.5%
    Market price
    HKD 155.10

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn9bn18bnFY25FY26FY27FY28FY29
    Nominal FCFFDiscounted to todayCNY
    LineFY25FY26FY27FY28FY29CAGR
    RevenueCNY 18.6bnCNY 26.5bnCNY 37.9bnCNY 54.0bnCNY 77.0bn+42.7%
    EBITCNY 4.1bnCNY 5.9bnCNY 8.4bnCNY 12.0bnCNY 17.1bn+42.7%
    NOPATCNY 3.5bnCNY 4.9bnCNY 7.0bnCNY 10.0bnCNY 14.3bn+42.7%
    Add depreciation & amortisationCNY 1.9bnCNY 2.7bnCNY 3.8bnCNY 5.4bnCNY 7.7bn+42.7%
    Less capital expenditureCNY -1.2bnCNY -1.7bnCNY -2.4bnCNY -3.4bnCNY -4.8bn+42.7%
    Less increase in working capitalCNY 202.7mCNY 289.2mCNY 412.6mCNY 588.6mCNY 839.7m-42.7%
    Free cashflow to firmCNY 4.3bnCNY 6.2bnCNY 8.9bnCNY 12.6bnCNY 18.0bn+42.7%
    Discount factor0.95190.86240.78140.70790.6414-
    Present valueCNY 4.1bnCNY 5.4bnCNY 6.9bnCNY 8.9bnCNY 11.6bn+29.3%
    Present Value Of The ForecastCNY 36.9bn

    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
    Beta1.029Reported 1.043, pulled toward 1.0 (Blume)
    Cost of equity10.40%Risk-free + beta x equity risk premium
    Cost of debt4.85%Interest expense / average total debt
    Market capitalisationCNY 204.9bn99.5% of capital
    Total debtCNY 964.6m0.5% of capital, book value as a proxy
    Tax rate16.5%Effective, capped at statutory
    WACC10.37%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 111.77

    74% of EV

    Forecast FCFF, final year
    CNY 18.0bn
    Capex at depreciation, working capital in reinvestment
    CNY 15.2bn
    Less reinvestment at g/ROIC (18.4% of NOPAT)
    CNY -2.8bn
    Capitalised
    CNY 12.4bn
    ROIC (reported)
    13.6%
    Terminal value, undiscounted
    CNY 161.1bn
    Terminal value, discounted
    CNY 103.3bn
    Enterprise value
    CNY 140.2bn
    Less net debt
    CNY -8.7bn
    Equity value
    CNY 148.9bn

    Exit at 20.0x EBITDA

    Value per shareCNY 273.49

    90% of EV

    Terminal value, undiscounted
    CNY 496.9bn
    Terminal value, discounted
    CNY 318.7bn
    Enterprise value
    CNY 355.6bn
    Less net debt
    CNY -8.7bn
    Equity value
    CNY 364.3bn

    Spread between methods: 84%.

    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%
    8.37%139.90143.97148.68154.22160.83
    9.37%122.19124.71127.55130.79134.53
    10.37%108.49110.05111.77113.70115.86
    11.37%97.5798.5399.56100.68101.91
    12.37%88.6789.2389.8190.4491.10

    Outlined: this model. Green text: above today's price of 132.47. 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 year42.7%48.3%+5.6pp
    EBIT margin22.3%27.1%+4.8pp
    Discount rate10.4%9.1%-1.3pp
    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.