Discounted Cash Flow Calculation for DB:LIL3 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:LIL3 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Paradise Entertainment's share price is below the future cash flow value, and at a moderate discount (> 20%).
Paradise Entertainment's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Paradise Entertainment's earnings available for a low price, and how does
this compare to other companies in the same industry?
In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Paradise Entertainment has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.
This is quite a rare situation as 97% of companies covered by Simply Wall St do have past financial data. You can see them here.
Show me the analysis anyway
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected Hospitality industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Paradise Entertainment's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Paradise Entertainment's earnings growth to the Germany market average as no estimate data is available.
Unable to compare Paradise Entertainment's revenue growth to the Germany market average as no estimate data is available.
Unable to determine if Paradise Entertainment is high growth as no earnings estimate data is available.
Unable to determine if Paradise Entertainment is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Paradise Entertainment's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Paradise Entertainment's finances.
The net worth of a company is the difference between its assets and liabilities.
Paradise Entertainment is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Paradise Entertainment's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Paradise Entertainment's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is covered by short term assets, assets are 6x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Jay Chun has been the Managing Director of Paradise Entertainment Limited since January 1999 and has been its Chairman since July 2002. Mr. Chun has a solid background in information technology and marketing and over 14 years of Management and Investment Experience. He is a talented Entrepreneur and Manager. He serves as an Executive Director of Paradise Entertainment Limited. He served as an Independent Non Executive Director of FT Holdings International Ltd. since August 22, 2003. Mr. Chun served as an Independent Non-executive Director of Hua Yi Copper Holdings Ltd. until June 29,2005. He served as an Independent Non Executive Director of Hong Kong Health Check and Laboratory Holdings Company Limited since January 12, 2005 until October 23, 2006. Mr. Chun is one of the founder members of Macau Gaming Equipment Manufacturers Association ("MGEMA") and has been the chairman of MGEMA since its establishment in 2012. Mr. Chun holds a master’s degree in business administration from the W.P. Carey School of Business at the Arizona State University and a bachelor’s degree in computer science from the Shanghai University of Science and Technology.
Jay's compensation has increased in line with Paradise Entertainment recently becoming profitable.
Jay's remuneration is higher than average for companies of similar size in Germany.
Chairman & MD
Kin Man Chan
Groups CFO & Company Secretary
Groups Chief Operating Officer of the Electronic Gaming Business
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Paradise Entertainment board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Paradise Entertainment Limited, an investment holding company, primarily provides casino management services in Macau and internationally. The company operates through Casino Management Services and Gaming Systems segments. It operates Casino Kam Pek Paradise, which offers various games, such as baccarat, roulette, sic bo, etc. on live multi gaming terminals, traditional tables, and slot machines; and Casino Waldo, a boutique hotel accommodating 162 guest rooms and a casino to play games on traditional tables, slot machines, and live multi gaming machines. The company also engages in the development, sale, and leasing of electronic gaming equipment and systems. Its gaming products include the Live Multi Game Machine system, which broadcasts live dealers to multiple terminals and supports multiple tables betting on the same terminal; and the Paradise Jackpot System, a baccarat side-bet progressive jackpot. In addition, it provides management and consulting services; and properties holding, market development, and software development services. The company was formerly known as LifeTec Group Limited and changed its name to Paradise Entertainment Limited in May 2007. The company was incorporated in 1996 and is headquartered in Central, Hong Kong. Paradise Entertainment Limited is a subsidiary of August Profit Investments Limited.
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