Discounted Cash Flow Calculation for OTCPK:SZNT.F 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.
OTCPK:SZNT.F 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
Shenzhen Investment's earnings available for a low price, and how does
this compare to other companies in the same industry?
Shenzhen Investment's earnings are expected to grow by 8.2% yearly, however this is not considered high growth (20% yearly).
Shenzhen Investment's revenue is expected to grow by 15.3% 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.
Shenzhen Investment'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
Shenzhen Investment's finances.
The net worth of a company is the difference between its assets and liabilities.
Shenzhen Investment is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Shenzhen Investment's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Shenzhen Investment'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 1.7x 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. Huang Wei has been the President and Executive Director of Shenzhen Investment Ltd. since July 21, 2015. Mr. Wei serves as General Manager, Deputy Party Secretary and Director of Shum Yip Group Limited. Prior to joining Shum Yip Group Limited, Mr. Wei served as the Deputy Secretary of the Party Working Committee, Deputy Director of the Management Committee and Director of Social Work Committee of CPC Shenzhen Dapeng New District. He was a Member of the Standing Committee, the director of district committee (government district) Office and a district government party member of Longgang District and the Longgang District Youth League secretary. Mr. Wei has extensive experience in management. Mr. Wei was an on-the-job graduate at Guangdong Academy of Social Sciences, where he graduated with a major in law. He holds a Master's Degree in Business Administration from Guanghua School of Management, Peking University.
Wei's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Wei's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Shenzhen Investment management team is over 5 years, this suggests they are a seasoned and experienced team.
Chairman of the Board
Executive Director & President
Executive Director & VP
General Manager of Finance Management Department
Senior IR Manager
General Counsel & Secretary
General Manager of Capital Market Department
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Shenzhen Investment board of directors is about average.
Shenzhen Investment Limited, together with its subsidiaries, invests in, develops, and manages real estate properties in Mainland China. The company operates through five segments: Property Development, Property Investment, Property Management, Manufacture, and Others. It invests in and develops residential, industrial, and commercial properties; manages properties; and manufacture and sells industrial and commercial products. The company also manufactures and sells aluminum alloy, agricultural, and LCD products; designs and constructs gardens; and operates hotels and warehouses. The company is based in Tsim Sha Tsui, Hong Kong. Shenzhen Investment Limited is a subsidiary of Shum Yip Holdings Company Limited.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.