Community Investing Ideas

Global Weekly Picks

US$750
FV
34.8% undervalued intrinsic discount
14.01%
Revenue growth p.a.
6.1k
users have viewed this narrative
8users have liked this narrative
1users have commented on this narrative
65users have followed this narrative
US$14.13
4.6% overvalued intrinsic discount
Fair Value
Profit Margin
5%
Future PE
10x
Price in 2029
US$19.81
JP¥4.05k
48.3% undervalued intrinsic discount
Fair Value
Revenue
19.5% p.a.
Profit Margin
15%
Future PE
16.8x
Price in 2031
JP¥5.7k
RM 0.092
46.7% overvalued intrinsic discount
Fair Value
Revenue
N/A
Profit Margin
1.49%
Future PE
10.47x
Price in 2031
RM 1.33
US$22.74
45.2% undervalued intrinsic discount
Fair Value
Revenue
24% p.a.
Profit Margin
41%
Future PE
23x
Price in 2031
US$41.89
ر.س18
0.6% overvalued intrinsic discount
Fair Value
Specialized Sector Valuation: Residual Income (RI) ModelYou pointed out the importance of fair value assuming a 3-year horizon based on Residual Income. This is the most accurate sectoral model for utilities, calculated as follows:$$V_0 = BV_0 + \sum_{t=1}^{n} \frac{NI_t - (r_e \times BV_{t-1})}{(1 + r_e)^t}$$ Where:$BV_0$: Current Book Value per share (~19.5 SAR).$NI_t$: Expected Net Income.$r_e$: Target Cost of Equity, assumed at 8.0% given the defensive nature of the company.Residual Income = Net Income - (Cost of Equity × Book Value).Application to SEC:Due to the Mudaraba instrument and regulatory constraints, the company's ROE is roughly 3.5% to 4.5%, which is lower than the Cost of Equity ($r_e = 8\%$).Since $ROE < r_e$, the "Residual Income" is technically negative. This is the precise scientific and logical explanation for why the stock currently trades at (16.73 SAR), which is below its book value (19.5 SAR). The market discounts this difference.Fair Value in 3 Years (2029):Expecting slight operational efficiency improvements (smart meters and green financing), and assuming ROE stabilizes at 5.5% while maintaining the fixed payout policy (0.70 SAR), the fair value calculated using the RI model for the next 3 years centers in the range of 17.80 to 18.50 SAR.
ر.س98.6
36.1% undervalued intrinsic discount
Fair Value
Set with the author's own calculation method
₦93.59
22.9% overvalued intrinsic discount
Fair Value
Revenue
18.07% p.a.
Profit Margin
44.02%
Future PE
5.03x
Price in 2031
₦293.02