600028.SS
CHINA PETROLEUM & CHEMICAL CORPOpen600028.SS discounted cash flow valuation
600028.SS Fair Value
Reverse DCF: today's price implies 7.1% a year of FCF growth for years 1–5, against -2.0% in this model.
Model: -2.0% from analyst next-year revenue growth (capped). Fades linearly to terminal growth by year 10.
Model: 7.19% (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 | CNY 187.04B |
|---|---|
| PV of terminal value (64% of EV) | CNY 336.56B |
| Enterprise value | CNY 523.61B |
| + Cash & investments | CNY 185.77B |
| − Total debt | −CNY 566.95B |
| Equity value | CNY 142.43B |
| ÷ Shares outstanding | 97.04B |
| Value per share | CNY 1.47 |
| Market cap | CNY 655.47B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.19% |
|---|---|
| Beta (adjusted toward 1) | 0.82 |
| Equity risk premium | 4.50% |
| Cost of equity (CAPM) | 8.89% |
| Pre-tax cost of debt | 5.19% |
| Tax rate | 19.0% |
| Debt / (equity + debt) | 46.4% |
| WACC | 7.19% |
Beta is Yahoo's, held between 0.5 and 2.5, then moved a third of the way toward 1. Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%. WACC is at least the risk-free rate plus 2%, which applies here.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 2.00% | 2.50% | 3.00% | 3.50% | 4.00% |
|---|---|---|---|---|---|
| 5.19% | 3.46 | 4.58 | 6.20 | 8.78 | 13.53 |
| 6.19% | 1.74 | 2.33 | 3.09 | 4.15 | 5.68 |
| 7.19% | 0.6812 | 1.03 | 1.47 | 2.02 | 2.75 |
| 8.19% | -0.0377 | 0.1923 | 0.4665 | 0.7991 | 1.21 |
| 9.19% | -0.5577 | -0.3981 | -0.2128 | 0.004997 | 0.2647 |
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) | — | CNY 28.87B | — | — |
| Year 1 | -2.0% | CNY 28.29B | 0.933 | CNY 26.40B |
| Year 2 | -2.0% | CNY 27.73B | 0.870 | CNY 24.13B |
| Year 3 | -2.0% | CNY 27.17B | 0.812 | CNY 22.06B |
| Year 4 | -2.0% | CNY 26.63B | 0.758 | CNY 20.17B |
| Year 5 | -2.0% | CNY 26.10B | 0.707 | CNY 18.44B |
| Year 6 | -1.0% | CNY 25.84B | 0.659 | CNY 17.03B |
| Year 7 | 0.0% | CNY 25.84B | 0.615 | CNY 15.89B |
| Year 8 | 1.0% | CNY 26.09B | 0.574 | CNY 14.97B |
| Year 9 | 2.0% | CNY 26.62B | 0.535 | CNY 14.25B |
| Year 10 | 3.0% | CNY 27.41B | 0.499 | CNY 13.69B |
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 next year's revenue growth (steadier than one year's EPS), else next year's EPS growth, else revenue CAGR, held between −2% and 25%. Terminal growth defaults to 3%.
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.