0006.HK
POWER ASSETSOpen0006.HK discounted cash flow valuation
0006.HK Fair Value
Reverse DCF: today's price implies 33.9% a year of FCF growth for years 1–5, against -5.0% in this model.
Model: -5.0% from analyst next-year EPS & revenue growth (capped). Fades linearly to terminal growth by year 10.
Model: 8.28% (CAPM, see the build-up).
Long-run growth after year 10; keep it at or below nominal GDP.
Value Bridge
| PV of free cash flow, years 1–10 | HKD 4.77B |
|---|---|
| PV of terminal value (53% of EV) | HKD 5.33B |
| Enterprise value | HKD 10.10B |
| + Cash & investments | HKD 45.28B |
| − Total debt | −HKD 2.77B |
| Equity value | HKD 52.60B |
| ÷ Shares outstanding | 2.13B |
| Value per share | HKD 24.68 |
| Market cap | HKD 128.72B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.22% |
|---|---|
| Beta (clamped 0.5–2.5) | 0.61 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 8.29% |
| Pre-tax cost of debt | 8.23% |
| Tax rate | 3.4% |
| Debt / (equity + debt) | 2.1% |
| WACC | 8.28% |
Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 6.28% | 25.88 | 26.37 | 26.99 | 27.81 | 28.92 |
| 7.28% | 24.91 | 25.22 | 25.60 | 26.07 | 26.66 |
| 8.28% | 24.22 | 24.43 | 24.68 | 24.98 | 25.34 |
| 9.28% | 23.71 | 23.86 | 24.04 | 24.24 | 24.47 |
| 10.28% | 23.31 | 23.43 | 23.55 | 23.70 | 23.86 |
Green is above today's price, red below (full colour at ±30%). The outlined centre cell is the current inputs.
Projected Cash Flows
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Base (FY2025) | — | HKD 883.00M | — | — |
| Year 1 | -5.0% | HKD 838.85M | 0.924 | HKD 774.70M |
| Year 2 | -5.0% | HKD 796.91M | 0.853 | HKD 679.69M |
| Year 3 | -5.0% | HKD 757.06M | 0.788 | HKD 596.33M |
| Year 4 | -5.0% | HKD 719.21M | 0.727 | HKD 523.19M |
| Year 5 | -5.0% | HKD 683.25M | 0.672 | HKD 459.03M |
| Year 6 | -3.5% | HKD 659.33M | 0.620 | HKD 409.09M |
| Year 7 | -2.0% | HKD 646.15M | 0.573 | HKD 370.25M |
| Year 8 | -0.5% | HKD 642.92M | 0.529 | HKD 340.23M |
| Year 9 | 1.0% | HKD 649.35M | 0.489 | HKD 317.35M |
| Year 10 | 2.5% | HKD 665.58M | 0.451 | HKD 300.41M |
Method
Two-stage free-cash-flow model, the same as the bot's lgf dcf: five years at the chosen growth rate, a straight-line fade to terminal growth by year ten, then a Gordon-growth terminal value. Everything is discounted at WACC.
Base cash flow is the trailing four quarters of operating cash flow minus capital expenditure (the latest fiscal year when quarters are missing). Default growth uses analyst long-term growth when Yahoo publishes it, else the average of next year's EPS and revenue growth, else revenue CAGR, held between −5% and 25%.
A DCF is only as good as its inputs. The terminal value is usually most of the answer, so read the sensitivity grid before the headline number. This is a model, not investment advice.