600186.SS
LOTUS HOLDINGS CO LTDOpen600186.SS discounted cash flow valuation
600186.SS Fair Value
Reverse DCF: today's price implies 21.2% a year of FCF growth for years 1–5, against 25.0% in this model.
Model: 25.0% from 3-yr revenue CAGR (capped). Fades linearly to terminal growth by year 10.
Model: 8.00% (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 6.11B |
|---|---|
| PV of terminal value (71% of EV) | CNY 15.17B |
| Enterprise value | CNY 21.29B |
| + Cash & investments | CNY 1.30B |
| − Total debt | −CNY 856.25M |
| Equity value | CNY 21.73B |
| ÷ Shares outstanding | 1.79B |
| Value per share | CNY 12.12 |
| Market cap | CNY 17.84B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.19% |
|---|---|
| Beta (adjusted toward 1) | 0.67 |
| Equity risk premium | 4.50% |
| Cost of equity (CAPM) | 8.18% |
| Pre-tax cost of debt | 5.19% |
| Tax rate | 18.9% |
| Debt / (equity + debt) | 4.6% |
| WACC | 8.00% |
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%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 2.00% | 2.50% | 3.00% | 3.50% | 4.00% |
|---|---|---|---|---|---|
| 6.00% | 16.33 | 18.37 | 21.09 | 24.89 | 30.59 |
| 7.00% | 12.78 | 13.98 | 15.47 | 17.40 | 19.96 |
| 8.00% | 10.43 | 11.20 | 12.12 | 13.25 | 14.67 |
| 9.00% | 8.76 | 9.29 | 9.90 | 10.63 | 11.51 |
| 10.00% | 7.52 | 7.89 | 8.33 | 8.83 | 9.41 |
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) | — | CNY 300.66M | — | — |
| Year 1 | 25.0% | CNY 375.82M | 0.926 | CNY 347.98M |
| Year 2 | 25.0% | CNY 469.78M | 0.857 | CNY 402.76M |
| Year 3 | 25.0% | CNY 587.22M | 0.794 | CNY 466.16M |
| Year 4 | 25.0% | CNY 734.03M | 0.735 | CNY 539.53M |
| Year 5 | 25.0% | CNY 917.54M | 0.681 | CNY 624.46M |
| Year 6 | 20.6% | CNY 1.11B | 0.630 | CNY 697.32M |
| Year 7 | 16.2% | CNY 1.29B | 0.583 | CNY 750.26M |
| Year 8 | 11.8% | CNY 1.44B | 0.540 | CNY 776.66M |
| Year 9 | 7.4% | CNY 1.54B | 0.500 | CNY 772.34M |
| Year 10 | 3.0% | CNY 1.59B | 0.463 | CNY 736.59M |
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.