Discounted Cash Flow Calculation for SEHK:2588 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.
SEHK:2588 DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
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
BOC Aviation's earnings available for a low price, and how does
this compare to other companies in the same industry?
BOC Aviation's earnings are expected to grow by 10.6% yearly, however this is not considered high growth (20% yearly).
BOC Aviation's revenue is expected to grow by 13.3% yearly, however this is not considered high growth (20% yearly).
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.
BOC Aviation'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
2/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
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. Robert James Martin has been the Chief Executive Officer and Managing Director of BOC Aviation Pte. Ltd since 2004 and July 5, 1998 respectively. Mr. Martin has been an Executive Director of BOC Aviation Pte. Ltd. since July 5, 1998. He joined Singapore Aircraft Leasing Enterprise (SALE) in January 1998. He began his career in aircraft financing in London in 1987, with the Bank of America. He subsequently held senior positions in both London and Singapore with the Long-Term Credit Bank of Japan (LTCB), before moving to HSBC Investment Bank in Hong Kong as Aircraft Finance Director. Mr. Martin holds an M.A. in Economics from Cambridge University.
Robert's compensation has been consistent with company performance over the past year.
Robert's remuneration is higher than average for companies of similar size in Hong Kong.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the BOC Aviation management team is over 5 years, this suggests they are a seasoned and experienced team.
MD, CEO & Executive Director
Vice Chairman & Deputy MD
Deputy MD & CFO
Chief Operating Officer
Chief Accounting Officer
Head of Investor Relations
Chief Commercial Officer of Europe-Americas & Africa
Head of Risk Management
Head of Airline Leasing & Sales - Asia Pacific Middle East
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the BOC Aviation board of directors is less than 3 years, this suggests a new board.
BOC Aviation Limited (HKG:2588): Is Growth Priced In?
BOC Aviation Limited (HKG:2588) is considered a high-growth stock, but its last closing price of HK$63 left some investors wondering if this high future earnings potential can be rationalized by its current price tag. … What can we expect from BOC Aviation in the future. … Analysts are predicting good growth prospects for BOC Aviation over the next couple of years
Update: BOC Aviation Stock Gained 56% In The Last Year
For example, the BOC Aviation Limited (HKG:2588) share price is up 56% in the last year, clearly besting than the market return of around -7.3% (not including dividends). … In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. … One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Evaluating BOC Aviation Limited’s (HKG:2588) Investments In Its Business
Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires. … What is Return On Capital Employed (ROCE)? … ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business.
Could The BOC Aviation Limited (HKG:2588) Ownership Structure Tell Us Something Useful?
The big shareholder groups in BOC Aviation Limited (HKG:2588) have power over the company. … Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. … Our analysis of the ownership of the company, below, shows that.
Boasting A 16% Return On Equity, Is BOC Aviation Limited (HKG:2588) A Top Quality Stock?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … One way to conceptualize this, is that for each HK$1 of shareholders' equity it has, the company made HK$0.16 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity
Read This Before You Buy BOC Aviation Limited (HKG:2588) Because Of Its P/E Ratio
This article is written for those who want to get better at using price to earnings ratios (P/E ratios). … Price to Earnings Ratio = Price per Share (in the reporting currency) ÷ Earnings per Share (EPS) … P/E of 7.99 = $7.41 (Note: this is the share price in the reporting currency, namely, USD ) ÷ $0.93
Did BOC Aviation Limited (HKG:2588) Create Value For Shareholders?
This analysis is intended to introduce important early concepts to people who are starting to invest. … and want to start learning about core concepts of fundamental analysis on practical examples from today's market. … View our latest analysis for BOC Aviation
Is BOC Aviation Limited (HKG:2588) Potentially Underrated?
BOC Aviation Limited (HKG:2588) is a stock with outstanding fundamental characteristics. … When we build an investment case, we need to look at the stock with a holistic perspective. … Below, I've touched on some key aspects you should know on a high level
BOC Aviation Limited, together with its subsidiaries, operates as an aircraft operating leasing company worldwide. The company offers a range of services to airlines and aircraft owners, including direct operating leases, sale and leaseback facilities, and third party asset management. It also provides aircraft remarketing, structured finance, and technical management services to airlines, banks, and other investors. In addition, the company arranges debt financing and other financial services for airlines; and sells aircrafts. As of December 31, 2018, it had a fleet of 511 owned, managed, or on order aircraft. The company was founded in 1993 and is headquartered in Singapore. BOC Aviation Limited is a subsidiary of Sky Splendor Limited.
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