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2. Company Fundamentals
2.3 Management
| Role |
Metric |
| Consensus Rating |
N/A |
2.4 Return
| Metric |
Value |
| Expected Return (Ann.) |
17.35% |
| Risk / Std Dev (Ann.) |
47.30% |
Price Snapshot:
| Metric |
Value |
| Last Price |
15.980 HKD |
| Day Change |
-0.510 (-3.19%) |
DuPont Model Analysis
The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:
ROE = Net Margin × Asset Turnover × Equity Multiplier
The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in HK$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.
| DuPont component |
Calculation |
FY2025 |
FY2024 |
| Revenue |
Reported revenue |
HK$24.33B |
HK$17.80B |
| Net income |
Reported net income |
HK$622.99M |
HK$-1.16B |
| Total assets |
Year-end reported balance |
HK$46.47B |
HK$38.54B |
| Shareholders’ equity |
Year-end reported balance |
HK$11.75B |
HK$10.27B |
| Net margin |
Net income ÷ revenue |
2.56% |
-6.54% |
| Asset turnover |
Revenue ÷ total assets |
0.5236x |
0.4618x |
| Equity multiplier |
Total assets ÷ shareholders’ equity |
3.9559x |
3.7519x |
| ROE |
Net margin × asset turnover × equity multiplier |
5.30% |
-11.32% |
Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.
2.5 FCFF DCF Valuation
Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.
Step 1 — Forecast Operating Profit and NOPAT
| Reported operating input |
Value |
| Revenue |
HK$24.33B |
| Prior annual revenue |
HK$17.80B |
| EBIT |
HK$1.02B |
| Tax rate |
4.99% |
| NOPAT = EBIT × (1 − tax rate) |
HK$971.64M |
| Forecast start-growth basis |
15.00% |
| Forecast policy |
latest reported annual revenue growth, bounded to -10.00% / 15.00% |
Step 2 — Calculate FCFF
| Current FCFF building block |
Value |
| NOPAT |
HK$971.64M |
| Add: depreciation & amortisation |
HK$1.57B |
| Less: capital expenditure |
-HK$3.05B |
| Less/(add): working-capital cash-flow movement |
HK$786.55M |
| Current unlevered FCFF |
HK$270.11M |
Explicit FCFF forecast
| Forecast year |
Revenue growth |
NOPAT |
D&A |
Capex |
Change in NWC |
FCFF |
Present value |
| 1 |
15.00% |
HK$1.12B |
HK$1.80B |
-HK$3.51B |
HK$904.53M |
HK$310.62M |
HK$302.66M |
| 2 |
11.88% |
HK$1.25B |
HK$2.01B |
-HK$3.45B |
HK$1.01B |
HK$826.14M |
HK$764.21M |
| 3 |
8.75% |
HK$1.36B |
HK$2.19B |
-HK$3.23B |
HK$1.10B |
HK$1.42B |
HK$1.25B |
| 4 |
5.62% |
HK$1.44B |
HK$2.31B |
-HK$2.86B |
HK$1.16B |
HK$2.05B |
HK$1.71B |
| 5 |
2.50% |
HK$1.47B |
HK$2.37B |
-HK$2.37B |
HK$1.19B |
HK$2.66B |
HK$2.11B |
Step 3 — Determine the Discount Rate (WACC)
| WACC input |
Value |
| Risk-free rate |
4.71% |
| Equity risk premium assumption |
5.50% |
| Beta |
0.28 |
| Cost of equity |
6.23% |
| Pre-tax cost of debt |
3.10% |
| WACC |
5.33% |
| WACC validation |
requires assumption review |
Step 4 — Estimate Terminal Value
| Terminal-value input |
Value |
| Perpetuity growth rate |
2.50% |
| Terminal value |
HK$96.40B |
| Implied terminal EV / EBITDA |
24.58x |
| Terminal value as % of enterprise value |
92.38% |
Step 5 — Discount Cash Flows to Enterprise Value
| Enterprise-value component |
Value |
| Present value of explicit FCFF |
HK$6.13B |
| Present value of terminal value |
HK$74.35B |
| Indicated enterprise value |
HK$80.48B |
| Discounting convention |
mid-year for explicit FCFF; terminal value discounted at year-end five |
Step 6 — Convert Enterprise Value to Equity Value
| Equity bridge |
Value |
| Indicated enterprise value |
HK$80.48B |
| Less: gross interest-bearing debt |
HK$9.70B |
| Add: cash and equivalents |
HK$5.75B |
| Add: affiliate investments |
HK$0.00 |
| Less: minority interests |
HK$107.97M |
| Indicated common equity value |
HK$76.42B |
Step 7 — Calculate Indicative Value Per Share
| Per-share output |
Value |
| Shares used |
2,285,750,762.00 |
| Share-count basis |
reported diluted weighted-average shares |
| Current market price |
HK$11.00 |
| DCF indicative value per share |
HK$33.43 |
| Indicative value vs. market price |
203.95% |
Model Integrity Checks
| Check |
Result |
| Perpetuity growth is below the risk-free rate |
pass |
| Perpetuity growth is below WACC |
pass |
| WACC is within the configured operating-company range |
review required |
| Terminal-year FCFF is positive |
pass |
| Terminal capex converges to D&A |
pass |
| Terminal-value concentration |
review required |
| Implied price differs from spot by more than 30% |
review required |
2.6 Investor-Style Research Screen
| Educational screen |
Result |
| Buffett-inspired cash-quality checks |
3/4 evidenced checks |
| Lynch-inspired balance-and-growth checks |
4/4 evidenced checks |
Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 16:31:46.512978 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.
2.7 Quantitative Factor Diagnostics
Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.
| Estimation input |
Value |
| Regional factor set |
Asia Pacific ex Japan |
| Factor-return currency |
USD |
| Issuer-return basis |
USD adjusted total return |
| Estimation window |
2025-08-20 to 2026-06-30 |
| Aligned daily observations |
210 |
| Minimum observation requirement |
120 |
| Currency conversion for HK listings |
HKD adjusted close divided by daily USD/HKD close before simple daily return calculation |
Fama–French Three-Factor and Five-Factor Results
| Diagnostic |
FF3 |
FF5 |
| Annualised alpha |
11.15% |
14.81% |
| Adjusted R² |
0.05 |
0.04 |
| Annualised residual volatility |
53.15% |
53.01% |
| Factor loading (t-statistic) |
FF3 |
FF5 |
| Market excess return (Mkt-RF) |
0.85 (2.80) |
0.73 (2.22) |
| Size (SMB) |
0.84 (1.88) |
0.52 (0.92) |
| Value (HML) |
0.81 (1.93) |
0.92 (1.97) |
| Profitability (RMW) |
NM |
0.04 (0.07) |
| Investment (CMA) |
NM |
-0.68 (-1.01) |
Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.