2002.TW
CHINA STEEL CORPClosed2002.TW discounted cash flow valuation
2002.TW Fair Value
Reverse DCF: today's price implies 13.8% a year of FCF growth for years 1–5, against 25.0% in this model.
Model: 25.0% from analyst next-year EPS & revenue growth (capped). Fades linearly to terminal growth by year 10.
Model: 5.89% (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 | TWD 197.15B |
|---|---|
| PV of terminal value (80% of EV) | TWD 765.73B |
| Enterprise value | TWD 962.87B |
| + Cash & investments | TWD 56.35B |
| − Total debt | −TWD 272.84B |
| Equity value | TWD 746.38B |
| ÷ Shares outstanding | 15.24B |
| Value per share | TWD 48.97 |
| Market cap | TWD 297.21B |
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 | 25.1% |
| Debt / (equity + debt) | 47.9% |
| WACC | 5.89% |
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% |
|---|---|---|---|---|---|
| 3.89% | 83.33 | 107.35 | 148.67 | 236.40 | — |
| 4.89% | 52.62 | 63.07 | 77.89 | 100.54 | 139.49 |
| 5.89% | 35.99 | 41.65 | 48.97 | 58.83 | 72.81 |
| 6.89% | 25.59 | 29.06 | 33.30 | 38.64 | 45.56 |
| 7.89% | 18.50 | 20.79 | 23.51 | 26.78 | 30.79 |
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) | — | TWD 8.60B | — | — |
| Year 1 | 25.0% | TWD 10.76B | 0.944 | TWD 10.16B |
| Year 2 | 25.0% | TWD 13.44B | 0.892 | TWD 11.99B |
| Year 3 | 25.0% | TWD 16.81B | 0.842 | TWD 14.15B |
| Year 4 | 25.0% | TWD 21.01B | 0.795 | TWD 16.71B |
| Year 5 | 25.0% | TWD 26.26B | 0.751 | TWD 19.72B |
| Year 6 | 20.5% | TWD 31.64B | 0.709 | TWD 22.45B |
| Year 7 | 16.0% | TWD 36.70B | 0.670 | TWD 24.59B |
| Year 8 | 11.5% | TWD 40.93B | 0.633 | TWD 25.89B |
| Year 9 | 7.0% | TWD 43.79B | 0.597 | TWD 26.16B |
| Year 10 | 2.5% | TWD 44.88B | 0.564 | TWD 25.32B |
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.