600887.SS
INNER MONGOLIA YILI INDS. GP COClosed600887.SS discounted cash flow valuation
600887.SS Fair Value
Reverse DCF: today's price implies -4.9% a year of FCF growth for years 1–5, against 14.2% in this model.
Model: 14.2% from analyst next-year EPS & revenue growth. Fades linearly to terminal growth by year 10.
Model: 6.89% (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 | CNY 185.01B |
|---|---|
| PV of terminal value (71% of EV) | CNY 452.24B |
| Enterprise value | CNY 637.25B |
| + Cash & investments | CNY 38.67B |
| − Total debt | −CNY 65.34B |
| Equity value | CNY 610.58B |
| ÷ Shares outstanding | 6.33B |
| Value per share | CNY 96.53 |
| Market cap | CNY 177.93B |
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 | 11.4% |
| Debt / (equity + debt) | 26.9% |
| WACC | 6.89% |
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% |
|---|---|---|---|---|---|
| 4.89% | 135.84 | 157.03 | 187.08 | 233.02 | 312.02 |
| 5.89% | 102.04 | 113.52 | 128.39 | 148.39 | 176.76 |
| 6.89% | 80.87 | 87.90 | 96.53 | 107.37 | 121.42 |
| 7.89% | 66.39 | 71.05 | 76.57 | 83.21 | 91.37 |
| 8.89% | 55.88 | 59.14 | 62.91 | 67.31 | 72.53 |
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 13.76B | — | — |
| Year 1 | 14.2% | CNY 15.71B | 0.936 | CNY 14.70B |
| Year 2 | 14.2% | CNY 17.95B | 0.875 | CNY 15.71B |
| Year 3 | 14.2% | CNY 20.49B | 0.819 | CNY 16.78B |
| Year 4 | 14.2% | CNY 23.40B | 0.766 | CNY 17.93B |
| Year 5 | 14.2% | CNY 26.73B | 0.717 | CNY 19.15B |
| Year 6 | 11.9% | CNY 29.90B | 0.670 | CNY 20.04B |
| Year 7 | 9.5% | CNY 32.74B | 0.627 | CNY 20.54B |
| Year 8 | 7.2% | CNY 35.09B | 0.587 | CNY 20.59B |
| Year 9 | 4.8% | CNY 36.79B | 0.549 | CNY 20.20B |
| Year 10 | 2.5% | CNY 37.71B | 0.514 | CNY 19.37B |
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.