2892.TW
FIRST FINANCIAL HOLDING CO LTDClosed2892.TW discounted cash flow valuation
FIRST FINANCIAL HOLDING CO LTD is a banks - regional company. Its cash flows include lending and deposits, so free cash flow isn't owner earnings and this model can mislead. Compare it with peers on book value and earnings instead.
2892.TW Fair Value
Reverse DCF: today's price implies 0.4% a year of FCF growth for years 1–5, against 4.3% in this model.
Model: 4.3% from analyst next-year EPS & revenue growth. Fades linearly to terminal growth by year 10.
Model: 8.73% (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 486.57B |
|---|---|
| PV of terminal value (57% of EV) | TWD 632.18B |
| Enterprise value | TWD 1.12T |
| + Cash & investments | TWD 331.85B |
| − Total debt | −TWD 640.09B |
| Equity value | TWD 810.51B |
| ÷ Shares outstanding | 14.38B |
| Value per share | TWD 56.37 |
| Market cap | TWD 584.53B |
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 | 12.00% |
| Tax rate | 19.5% |
| Debt / (equity + debt) | 52.3% |
| WACC | 8.73% |
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% |
|---|---|---|---|---|---|
| 6.73% | 76.24 | 84.09 | 93.79 | 106.08 | 122.19 |
| 7.73% | 60.22 | 65.36 | 71.49 | 78.91 | 88.09 |
| 8.73% | 48.64 | 52.22 | 56.37 | 61.24 | 67.03 |
| 9.73% | 39.89 | 42.48 | 45.43 | 48.82 | 52.74 |
| 10.73% | 33.05 | 34.99 | 37.16 | 39.62 | 42.41 |
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 61.36B | — | — |
| Year 1 | 4.3% | TWD 64.00B | 0.920 | TWD 58.86B |
| Year 2 | 4.3% | TWD 66.75B | 0.846 | TWD 56.46B |
| Year 3 | 4.3% | TWD 69.62B | 0.778 | TWD 54.16B |
| Year 4 | 4.3% | TWD 72.61B | 0.715 | TWD 51.95B |
| Year 5 | 4.3% | TWD 75.74B | 0.658 | TWD 49.84B |
| Year 6 | 3.9% | TWD 78.72B | 0.605 | TWD 47.64B |
| Year 7 | 3.6% | TWD 81.54B | 0.557 | TWD 45.39B |
| Year 8 | 3.2% | TWD 84.16B | 0.512 | TWD 43.09B |
| Year 9 | 2.9% | TWD 86.57B | 0.471 | TWD 40.76B |
| Year 10 | 2.5% | TWD 88.74B | 0.433 | TWD 38.42B |
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.