DCF Studio

    BS6.SI · SES · Industrials

    Yangzijiang Shipbuilding (Holdings) Ltd.

    Also onConsensus Drift

    Implied value per share

    SGD 40.50

    Market price

    SGD 5.17

    Implied upside

    +683.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · CNY model at 0.1899

    Wrong toolThis line has no market capitalisation, which means it is not ordinary shares - typically a hybrid, preference line, note or unlisted stub. A discounted cashflow values a claim on the whole business, so applying it here attributes all of the group’s revenue to a security that has no such claim. Its value is its coupon and call schedule. Look up the ordinary line instead.
    AdjustedReports in CNY, trades in SGD. Modelled in CNY, converted at the end.
    AdjustedCapital expenditure runs at 4.6% of revenue against depreciation of 2.0%. 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: USD assumption - no free live source available for this market.

    No usable EV/EBITDA (EBITDA is not positive), so the exit multiple falls back to 8x.

    Value Per Share

    Perpetuity growth
    SGD 40.50+683.4%
    Exit multiple
    SGD 7.03+36.0%
    Market price
    SGD 5.17

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn6bn13bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCNY
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCNY 31.7bnCNY 35.3bnCNY 39.2bnCNY 43.7bnCNY 48.6bn+11.2%
    EBITCNY 7.4bnCNY 8.2bnCNY 9.1bnCNY 10.1bnCNY 11.3bn+11.2%
    NOPATCNY 5.9bnCNY 6.6bnCNY 7.3bnCNY 8.1bnCNY 9.0bn+11.2%
    Add depreciation & amortisationCNY 623.0mCNY 693.0mCNY 771.0mCNY 857.7mCNY 954.1m+11.2%
    Less capital expenditureCNY -1.5bnCNY -1.6bnCNY -1.8bnCNY -2.0bnCNY -2.3bn+11.2%
    Less increase in working capitalCNY 3.2bnCNY 3.5bnCNY 3.9bnCNY 4.4bnCNY 4.9bn-11.2%
    Free cashflow to firmCNY 8.2bnCNY 9.1bnCNY 10.2bnCNY 11.3bnCNY 12.6bn+11.2%
    Discount factor0.98360.95150.92050.89060.8616-
    Present valueCNY 8.1bnCNY 8.7bnCNY 9.4bnCNY 10.1bnCNY 10.9bn+7.6%
    Present Value Of The ForecastCNY 47.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.20%USD assumption - no free live source available for this market (assumption)
    Equity risk premium6.50%Market assumption
    Beta0.925Reported 0.888, pulled toward 1.0 (Blume)
    Cost of equity10.21%Risk-free + beta x equity risk premium
    Cost of debt4.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationCNY 0.000.0% of capital
    Total debtCNY 5.5bn100.0% of capital, book value as a proxy
    Tax rate19.8%Effective, capped at statutory
    WACC3.37%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 213.28

    94% of EV

    Forecast FCFF, final year
    CNY 12.6bn
    Capex at depreciation, working capital in reinvestment
    CNY 9.0bn
    Less reinvestment at g/ROIC (15.4% of NOPAT)
    CNY -1.4bn
    Capitalised
    CNY 7.6bn
    ROIC (reported)
    16.2%
    Terminal value, undiscounted
    CNY 903.7bn
    Terminal value, discounted
    CNY 778.6bn
    Enterprise value
    CNY 825.7bn
    Less net debt
    CNY -14.6bn
    Equity value
    CNY 840.3bn

    Exit at 8.0x EBITDA

    Value per shareCNY 37.04

    64% of EV

    Terminal value, undiscounted
    CNY 97.8bn
    Terminal value, discounted
    CNY 84.2bn
    Enterprise value
    CNY 131.3bn
    Less net debt
    CNY -14.6bn
    Equity value
    CNY 145.9bn

    Spread between methods: 141%.

    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%
    1.37%—————
    2.37%235.36519.08———
    3.37%113.18144.95213.29467.67—
    4.37%76.1786.86103.24131.56192.49
    5.37%58.2663.2269.8979.3693.87

    Outlined: this model. Green text: above today's price of 27.22. 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 year11.2%-25.7%-36.9pp
    EBIT margin23.2%2.3%-21.0pp
    Discount rate3.4%11.4%+8.1pp
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.