# 3389 新宇亨得利
existing market price of $ 3.075 X by 10.37 億 of issued share => the co's market value is 31.89 億 vs 5.17 億 of net asset.
i.e. we are paying extra 26.72 億 to exchange for existing profit of 1 億 / yr + future growth.
Even assume 20 % compound growth NON-STOP in coming 10 yrs & then 'slow down and keep steady':
i.e. 1 + 1.2 + 1.44 + ......+ 4.3 + 5.16 in yr 10the co's 10 yr profit will be 25.96 億.
assume Div.payout ratio of 30% , i.e. 7.79 億so, expected equity after 10 yrs will be (5.17+25.96-7.79)億 => 23.34 億.
if market price at yr 10 is 10 PE , i.e. co's market value will be 51.6 億
in summary:we have to pay 31.89 億 NOW to exchage 59.39 億 (Div.7.79+ market value 51.6) 億 after 10 yrs.
i.e. on average only 7.1 % compound return.
worth it or not - Return vs Risk ??
other more positive projection:
if you belive the profit level will increase fr. 1 億 NOW to 10 億 after 10 yrs. (i.e. compound growth of 30% NON-STOP during the coming 10 yrs):
follow the same calculation above ,then ==>:
we pay 31.89 億 NOW to exchage 118.79 億 (Div.12.79+ market value 106) 億 after 10 yrs.
i.e. on average 15.7 % compound return
In summary:
Even we believe the profit level will be 10 times from now ==> Existing price level already meet it's fair value as the projected return of 15.7% almost = 10% return required for long-term investment + 5% return required for the risk of such a high growth
posted by 股怪 at
8:54 PM
8 Comments:
thks
but any missing step or anything to improve ?
By
股怪, at 06 February, 2006 23:18
Actually, I don't think
this is a practical approach.
But this is a good way for investor to decide whether their assumption (on the growth of the company) can help them to get their target return.
But the main issue is whether the assumption is reasonable.
So that the next step is to seek as many as factors to see if the company is likely to achieve this target or not. the factors may include:
1/ past record.
-is the past record fit the assumption?
- if yes, stable?
- if yes, if there is anything obviously different from previous year?
2/ quality of management
3/ the future market.
- the size of the total industry
4/ the current situation of the company
- long term/ short term debt?
- .....................
...
...
...
Then summarize everything, to get
your own judgement about the company.
May be one can use mathematically way ( of course again by assumption) to get more objective view of the stock.
By
desmond, at 07 February, 2006 00:48
desmond - thks for sharing !!!
yes, agree that the investor MUST: 1st- consider the factors as you mentions before reaching the assumed growth rate
2nd - apply the above growth rate to see if it worth to invest his $ at existing price level by refering to the calculated return
at least my approach (not too complicated ) can provide a more objective & logic method to help investor for their decision making !
welcome to all's sharing
By
股怪, at 07 February, 2006 00:58
also, my investment valuation model can help investor from saving their time if :
even a high growth rate is applied ==> existing market price is too high & thus not worth to invest by just looking on the projected compond return.
Then, the investor not need to spend time in considering the factor affecting the co's growth in future.
By
股怪, at 07 February, 2006 01:06
E.g. in my computation:
if an investor don't belive the co's profit level will increase fr. 1 億 NOW to 10 億 after 10 yrs.
Then, he don't need to do any further study upon the profit's growth rate.
By
股怪, at 07 February, 2006 01:28
hi max,
agree !
this valuation provide a 'What If' model to screen those already over price stock. Thus the saved time to do what is mentioned, i.e. co's business model ->where w/ value added => better forecast of future
By
股怪, at 07 February, 2006 18:15
Thanks for your calculation, I'm too lazy to do it.
I perfer use some quick reference. eg. PEG
By
Wing, at 07 February, 2006 21:21
Keep up the good work. thnx!
»
By
Anonymous, at 12 August, 2006 19:19
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