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Good Investment, But not at this Price

I definitely love hearing the unexceptional growth story of HaiDiLao, the rapid expansion, how they aim to become the global hotpot chain. This is definitely a good business model with their exceptional service...

But will I pay HKD80 per share for this company? NO.

Is HKD 18 a good price to pay for this company? NO.

Based on my rough calculation according to the Discounted Cash Flow methodology, I will only buy HaiDiLao at Eight dollars per share, yes you heard it right, HKD 8, not eighteen and most definitely not HKD 80.

I will post my calculation methodology here once I have the time, but for the time being, do take care of yourself and please think twice when you feel that this stock is trading at deep discount.

Wise words from ah huat: "Low can always go lower, look at Citibank, it never recovered since 2008. Don't buy a stock just because it fell by 70%, understand the value of the stock before buying it, look at value not price."
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