1812.HK
CHENMING PAPERClosed1812.HK discounted cash flow valuation
1812.HK Fair Value
Reverse DCF: today's price implies 47.6% a year of FCF growth for years 1–5, against -5.0% in this model.
Model: -5.0% from 3-yr revenue CAGR (capped). Fades linearly to terminal growth by year 10.
Model: 5.18% (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 513.01M |
|---|---|
| PV of terminal value (74% of EV) | HKD 1.44B |
| Enterprise value | HKD 1.95B |
| + Cash & investments | HKD 252.01M |
| − Total debt | −HKD 38.27B |
| Equity value | −HKD 36.06B |
| ÷ Shares outstanding | 528.31M |
| Value per share | HKD -68.26 |
| Market cap | HKD 1.54B |
CNY statements converted at 1.172 HKD.
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.22% |
|---|---|
| Beta (clamped 0.5–2.5) | 0.50 |
| Equity risk premium | 5.00% |
| Cost of equity (CAPM) | 7.72% |
| Pre-tax cost of debt | 5.22% |
| Tax rate | 2.6% |
| Debt / (equity + debt) | 96.1% |
| WACC | 5.18% |
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% |
|---|---|---|---|---|---|
| 3.18% | -65.83 | -63.54 | -57.87 | — | — |
| 4.18% | -68.07 | -67.33 | -66.16 | -63.99 | -58.64 |
| 5.18% | -69.09 | -68.74 | -68.26 | -67.57 | -66.46 |
| 6.18% | -69.67 | -69.48 | -69.23 | -68.90 | -68.45 |
| 7.18% | -70.05 | -69.93 | -69.78 | -69.59 | -69.36 |
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 (TTM) | — | HKD 82.80M | — | — |
| Year 1 | -5.0% | HKD 78.66M | 0.951 | HKD 74.79M |
| Year 2 | -5.0% | HKD 74.73M | 0.904 | HKD 67.55M |
| Year 3 | -5.0% | HKD 70.99M | 0.859 | HKD 61.01M |
| Year 4 | -5.0% | HKD 67.44M | 0.817 | HKD 55.11M |
| Year 5 | -5.0% | HKD 64.07M | 0.777 | HKD 49.77M |
| Year 6 | -3.5% | HKD 61.83M | 0.739 | HKD 45.67M |
| Year 7 | -2.0% | HKD 60.59M | 0.702 | HKD 42.55M |
| Year 8 | -0.5% | HKD 60.29M | 0.668 | HKD 40.25M |
| Year 9 | 1.0% | HKD 60.89M | 0.635 | HKD 38.65M |
| Year 10 | 2.5% | HKD 62.41M | 0.603 | HKD 37.67M |
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.