Discounted Cash Flow Calculation for SEHK:978 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
China Merchants Land
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:978 DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
China Merchants Land
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
China Merchants Land's
is considered below, and whether this is a fair price.
Price based on past earnings
China Merchants Land's earnings available for a low price, and how does
this compare to other companies in the same industry?
China Merchants Land's earnings are expected to grow by 11.4% yearly, however this is not considered high growth (20% yearly).
Unable to determine if China Merchants Land 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.
China Merchants Land'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.
China Merchants Land
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.
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
China Merchants Land's finances.
The net worth of a company is the difference between its assets and liabilities.
China Merchants Land is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
China Merchants Land's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
China Merchants Land'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 2.5x 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.
Read This Before You Buy China Merchants Land Limited (HKG:978) Because Of Its P/E Ratio
China Merchants Land has a price to earnings ratio of 4.17, based on the last twelve months. … The formula for price to earnings is: Price to Earnings Ratio = Price per Share (in the reporting currency) ÷ Earnings per Share (EPS) Or for China Merchants Land: P/E of 4.17 = CN¥1.03 (Note: this is the share price in the reporting currency, namely, CNY ) ÷ CN¥0.25 (Based on the trailing twelve months to December 2018.) Is A High Price-to-Earnings Ratio Good? … China Merchants Land's earnings per share fell by 26% in the last twelve months.
What Investors Should Know About China Merchants Land Limited's (HKG:978) Financial Strength
While small-cap stocks, such as China Merchants Land Limited (HKG:978) with its market cap of HK$6.9b, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. … Assessing first and foremost the financial health is. … We'll look at some basic checks that can form a snapshot the company’s financial strength.
The China Merchants Land Share Price Is Down 21% So Some Shareholders Are Getting Worried
While not a mind-blowing move, it is good to see that the China Merchants Land Limited (HKG:978) share price has gained 11% in the last three months. … By comparing earnings per share (EPS) and and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time. … During the unfortunate half decade during which the share price slipped, China Merchants Land actually saw its earnings per share (EPS) improve by 25% per year.
Do You Like China Merchants Land Limited (HKG:978) At This P/E Ratio?
To keep it practical, we'll show how China Merchants Land Limited's (HKG:978) P/E ratio could help you assess the value on offer. … Price to Earnings Ratio = Share Price (in reporting currency) ÷ Earnings per Share (EPS) … P/E of 2.94 = CN¥1.07 (Note: this is the share price in the reporting currency, namely, CNY ) ÷ CN¥0.36
Are China Merchants Land Limited's (HKG:978) Interest Costs Too High?
However, an important fact which most ignore is: how financially healthy is the business? … Evaluating financial health as part of your investment thesis is. … Here are few basic financial health checks you should consider before taking the plunge.
What Kind Of Investor Owns Most Of China Merchants Land Limited (HKG:978)?
A look at the shareholders of China Merchants Land Limited (HKG:978) can tell us which group is most powerful. … China Merchants Land is a smaller company with a market capitalization of HK$4.9b, so it may still be flying under the radar of many institutional investors. … See our latest analysis for China Merchants Land
Can China Merchants Land Limited (HKG:978) Continue To Outperform Its Industry?
China Merchants Land Limited (HKG:978) delivered an ROE of 14.1% over the past 12 months, which is an impressive feat relative to its industry average of 9.5% during the same period. … But ROE does not capture any debt, so we only see high profits and low equity, which is great on the surface. … View our latest analysis for China Merchants Land
How Has China Merchants Land Limited's (HKG:978) Performed Against The Industry?
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. … Investors may find my commentary, albeit very high-level and brief, on China Merchants Land Limited (HKG:978) useful as an attempt to give more color around how China Merchants Land is currently performing. … Check out our latest analysis for China Merchants Land?
Is China Merchants Land Limited (HKG:978) A Smart Choice For Dividend Investors?
China Merchants Land Limited (HKG:978) has returned to shareholders over the past 10 years, an average dividend yield of 2.00% annually. … Let's take a look at China Merchants Land in more detail. … View out our latest analysis for China Merchants Land
Brief Commentary On China Merchants Land Limited's (HKG:978) Fundamentals
China Merchants Land Limited (HKG:978) is a company with exceptional fundamental characteristics. … Upon building up an investment case for a stock, we should look at various aspects. … is a company with great financial health as well as a.
China Merchants Land Limited, an investment holding company, engages in the investment, development, management, lease, and sale of properties. Its property portfolio includes residential properties; and residential and commercial complex properties, such as apartments, villas, offices, retail shops, etc. As of December 31, 2018, the company’s portfolio of property development projects consisted of 29 projects in Foshan, Guangzhou, Chongqing, Nanjing, Jurong, and Xi’an; and a land bank of approximately 5,867,015 sq.m. It also sells electronic and electrical related products; and building related materials and equipment. The company is headquartered in Central, Hong Kong.
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