How far off is Miramar Hotel and Investment Company, Limited (HKG:71) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by projecting its future cash flows and then discounting them to today's value. We will use the Discounted Cash Flow (DCF) model on this occasion. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model.
Check out our latest analysis for Miramar Hotel and Investment Company
What's The Estimated Valuation?
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
10-year free cash flow (FCF) forecast
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
Levered FCF (HK$, Millions) | HK$446.8m | HK$430.3m | HK$421.3m | HK$417.1m | HK$416.3m | HK$417.7m | HK$420.7m | HK$424.9m | HK$430.0m | HK$435.6m |
Growth Rate Estimate Source | Est @ -5.98% | Est @ -3.7% | Est @ -2.1% | Est @ -0.99% | Est @ -0.2% | Est @ 0.34% | Est @ 0.73% | Est @ 0.99% | Est @ 1.18% | Est @ 1.31% |
Present Value (HK$, Millions) Discounted @ 7.4% | HK$416 | HK$373 | HK$340 | HK$314 | HK$291 | HK$272 | HK$255 | HK$240 | HK$226 | HK$213 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = HK$2.9b
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (1.6%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.4%.
Terminal Value (TV)= FCF2032 × (1 + g) ÷ (r – g) = HK$436m× (1 + 1.6%) ÷ (7.4%– 1.6%) = HK$7.7b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= HK$7.7b÷ ( 1 + 7.4%)10= HK$3.8b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is HK$6.7b. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of HK$10.8, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
![dcf](https://usnewsfile.futunn.com/pic/0-16961911-0-3b7578e74a583fb7ce8406f373c5bcae.png/big)
SEHK:71 Discounted Cash Flow November 18th 2022
Important Assumptions
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Miramar Hotel and Investment Company as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.4%, which is based on a levered beta of 0.990. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Looking Ahead:
Although the valuation of a company is important, it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Miramar Hotel and Investment Company, we've put together three pertinent factors you should look at:
- Risks: Every company has them, and we've spotted 1 warning sign for Miramar Hotel and Investment Company you should know about.
- Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
- Other Environmentally-Friendly Companies: Concerned about the environment and think consumers will buy eco-friendly products more and more? Browse through our interactive list of companies that are thinking about a greener future to discover some stocks you may not have thought of!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the SEHK every day. If you want to find the calculation for other stocks just search here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
美麗華酒店投資有限公司(HKG:71)離其內在價值還有多遠?使用最新的財務數據,我們將通過預測未來的現金流,然後將其貼現到今天的價值,來看看股票的定價是否公平。在這種情況下,我們將使用貼現現金流(DCF)模型。像這樣的模型可能看起來超出了外行的理解,但它們很容易被效仿。
我們通常認為,一家公司的價值是它未來將產生的所有現金的現值。然而,貼現現金流只是眾多估值指標中的一個,它也並非沒有缺陷。如果你對這類估值還有一些亟待解決的問題,不妨看看Simply Wall St.的分析模型。
查看我們對美麗華酒店和投資公司的最新分析
估計的估價是多少?
我們使用所謂的兩階段模型,也就是説,公司的現金流有兩個不同的增長率。一般來説,第一階段是較高增長階段,第二階段是較低增長階段。首先,我們必須對未來十年的現金流進行估計。由於沒有分析師對自由現金流的估計,我們根據公司最近報告的價值推斷出了之前的自由現金流(FCF)。我們假設,自由現金流萎縮的公司將減緩收縮速度,而自由現金流增長的公司在這段時間內的增長速度將放緩。我們這樣做是為了反映出,增長在最初幾年往往比後來幾年放緩得更多。
一般來説,我們假設今天的一美元比未來的一美元更有價值,因此我們需要對這些未來現金流的總和進行貼現,以得出現值估計:
10年自由現金流(FCF)預測
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
槓桿FCF(港幣,百萬元) | 4.468億港元 | 港幣4.303億元 | 4.213億港元 | 港幣4.171億元 | 港幣4.163億元 | 4.177億港元 | 4.207億港元 | 4.249億港元 | 港幣4.30億元 | 4.356億港元 |
增長率預估來源 | Est@-5.98% | Est@-3.7% | Est@-2.1% | Est@-0.99% | Est@-0.2% | Est@0.34% | Est@0.73% | Est@0.99% | Est@1.18% | Est@1.31% |
現值(港幣,百萬元)貼現@7.4% | 港幣416元 | 港幣373元 | 港幣340元 | 港幣314元 | 港幣291元 | 港幣272元 | 港幣255元 | 港幣240元 | 港幣226元 | 港幣213元 |
(“EST”=Simply Wall St.預估的FCF成長率)
10年期現金流現值(PVCF)=29億港元
我們現在需要計算終端價值,它説明瞭這十年之後的所有未來現金流。出於一些原因,使用了一個非常保守的增長率,不能超過一個國家的國內生產總值增長率。在這種情況下,我們使用了10年期政府債券收益率的5年平均值(1.6%)來估計未來的增長。與10年“增長”期一樣,我們使用7.4%的權益成本將未來現金流貼現至當前價值。
終端值(TV)=FCF2032×(1+g)?(r-g)=港幣4.36億×(1+1.6%)?(7.4%-1.6%)=港幣77億
終值現值(PVTV)=TV/(1+r)10=港幣77億?(1+7.4%)10=港幣38億元
總價值是未來十年的現金流總和加上貼現的終端價值,得出總股本價值,在本例中為67億港元。最後一步是將股權價值除以流通股數量。相對於目前10.8港元的股價,該公司在撰寫本文時似乎接近公允價值。不過,請記住,這只是一個大致的估值,就像任何複雜的公式一樣--垃圾輸入,垃圾輸出。
![dcf](https://usnewsfile.futunn.com/pic/0-16961911-0-3b7578e74a583fb7ce8406f373c5bcae.png/big)
聯交所:71貼現現金流2022年11月18日
重要假設
現在,貼現現金流最重要的投入是貼現率,當然還有實際現金流。投資的一部分是你自己對一家公司未來業績的評估,所以你自己試一試計算,檢查你自己的假設。DCF也沒有考慮一個行業可能的週期性,也沒有考慮一家公司未來的資本要求,因此它沒有給出一家公司潛在業績的全貌。鑑於我們將美麗華酒店投資公司視為潛在股東,股權成本被用作貼現率,而不是佔債務的資本成本(或加權平均資本成本,WACC)。在這個計算中,我們使用了7.4%,這是基於槓桿率為0.990的測試版。貝塔係數是衡量一隻股票相對於整個市場的波動性的指標。我們的貝塔係數來自全球可比公司的行業平均貝塔係數,強制限制在0.8到2.0之間,這是一個穩定業務的合理範圍。
展望未來:
儘管一家公司的估值很重要,但它不應該是你在研究一家公司時唯一考慮的指標。貼現現金流模型並不是一個完美的股票估值工具。相反,貼現現金流模型的最佳用途是測試某些假設和理論,看看它們是否會導致公司被低估或高估。例如,如果終端價值增長率稍有調整,可能會極大地改變整體結果。對於美麗華酒店和投資公司,我們總結了三個相關的因素,你應該看看:
- 風險:每家公司都有,我們已經發現了美麗華酒店和投資公司的1個警告標誌你應該知道。
- 其他高質量替代產品:你喜歡一個好的全能運動員嗎?瀏覽我們的高質量股票互動列表,瞭解您可能會錯過的其他股票!
- 其他環保公司:關注環境,認為消費者會越來越多地購買環保產品?瀏覽我們的互動列表,這些公司正在考慮更綠色的未來,發現一些你可能沒有想到的股票!
PS.Simply Wall St.應用每天對聯交所的每隻股票進行現金流貼現估值。如果你想找到其他股票的計算方法,只需搜索此處。
對這篇文章有什麼反饋嗎?擔心內容嗎? 保持聯繫直接與我們聯繫。或者,也可以給編輯組發電子郵件,地址是implywallst.com。
本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。