Inspur International Limited, an investment holding company, provides software development, cloud, and Internet of Things (IoT) services in the People’s Republic of China.
The last earnings update was 48 days ago.
Discounted Cash Flow Calculation for SEHK:596 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:596 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.
Inspur International's share price is below the future cash flow value, and at a moderate discount (> 20%).
Inspur International'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
Inspur International's earnings available for a low price, and how does
this compare to other companies in the same industry?
Inspur International's earnings are expected to grow by 15.3% yearly, however this is not considered high growth (20% yearly).
Inspur International's revenue is expected to grow by 17% 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.
Inspur International'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
5/6, 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
Inspur International's finances.
The net worth of a company is the difference between its assets and liabilities.
Inspur International is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Inspur International's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Inspur International'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.
Low level of unsold assets.
Inspur International has no debt, it does not need to be covered by short term assets.
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. Eric Kong Lee has been President, Chief Operating Officer and Executive Director of Inspur International Limited since August 1, 2017 and its Chief Executive Officer since August 17, 2018. Mr. Lee serves as Head of Outsourcing Business at Inspur Electronic Information Industry Co., Ltd. (alternate name, Inspur Group). Mr. Lee has over 15 years of experience in business management. For about 9 years, Mr. Lee has held technical, marketing and business development and business management positions in AT&T Network Systems International and Lucent Technologies in Europe, Russia, the People's Republic of China (PRC), Australia, Philippines and Malaysia. Mr. Lee later joined Oracle Corporation as client director for the Asia Pacific Enterprise Accounts Division, after which he joined the Group in October 2003 as co-founder and Chief Operating Officer, promoted to President and Chief Executive Officer the following year, of the Group's outsourcing start-up, successfully built the business from practically zero to one of the PRC's top five outsourcing firm servicing domestic and international markets. He resigned in October 2013 and have since then became a private investor for various projects. Mr. Lee attend a full-time MBA program of INSEAD in France in 1997. He first obtained a Master of Electrical Engineering from the University of Technology in Eindhoven, the Netherlands, in 1993.
Kong's compensation has been consistent with company performance over the past year, both up more than 20%.
Kong'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 tenure for the Inspur International management team is about average.
Chief Financial Officer
Compliance Officer & Non-Executive Director
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Inspur International board of directors is about average.
Why Inspur International Limited's (HKG:596) High P/E Ratio Isn't Necessarily A Bad Thing
We'll look at Inspur International Limited's (HKG:596) P/E ratio and reflect on what it tells us about the company's share price. … Inspur International has a P/E ratio of 14.44, based on the last twelve months. … Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS)
Can Inspur International Limited's (HKG:596) ROE Continue To Surpass The Industry Average?
Inspur International has a ROE of 11%, based on the last twelve months. … That means that for every HK$1 worth of shareholders' equity, it generated HK$0.11 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity
Can Inspur International Limited (HKG:596) Compete With Tech Giant Peers?
In the past decade, the mega-tech companies, such as Amazon and Microsoft, have built highly successful and ubiquitous platforms and ecosystem in which smaller companies gravitate towards … Other hardware and software tech service firms, including many that dominated before 2000, are struggling to compete, and are going through significant restructuring in order to move away from their legacy systems … Tech analysts are forecasting for the entire software tech industry,
Inspur International Limited, an investment holding company, provides software development, cloud, and Internet of Things (IoT) services in the People’s Republic of China. The company operates through Management Software and Cloud Services, and IoT Solutions segments. It is also involved in the trading of computer products, as well as sale of information technology peripherals and software; and property investment activities. The company was incorporated in 2003 and is based in Kowloon Bay, Hong Kong. Inspur International Limited is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. Inspur International Limited is a subsidiary of Inspur Overseas Investment Limited.
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