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2. Company Fundamentals
2.3 Management
| Role |
Metric |
| Consensus Rating |
N/A |
2.4 Return
| Metric |
Value |
| Expected Return (Ann.) |
139.75% |
| Risk / Std Dev (Ann.) |
66.20% |
Price Snapshot:
| Metric |
Value |
| Last Price |
7.830 HKD |
| Day Change |
-0.650 (-8.30%) |
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$6.89B |
HK$5.09B |
| Net income |
Reported net income |
HK$934.53M |
HK$480.31M |
| Total assets |
Year-end reported balance |
HK$4.39B |
HK$3.58B |
| Shareholders’ equity |
Year-end reported balance |
HK$2.43B |
HK$1.54B |
| Net margin |
Net income ÷ revenue |
13.57% |
9.43% |
| Asset turnover |
Revenue ÷ total assets |
1.5677x |
1.4210x |
| Equity multiplier |
Total assets ÷ shareholders’ equity |
1.8050x |
2.3249x |
| ROE |
Net margin × asset turnover × equity multiplier |
38.39% |
31.17% |
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$6.89B |
| Prior annual revenue |
HK$5.09B |
| EBIT |
HK$973.95M |
| Tax rate |
25.00% |
| NOPAT = EBIT × (1 − tax rate) |
HK$730.46M |
| 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$730.46M |
| Add: depreciation & amortisation |
HK$104.44M |
| Less: capital expenditure |
-HK$37.78M |
| Less/(add): working-capital cash-flow movement |
HK$87.13M |
| Current unlevered FCFF |
HK$884.25M |
Explicit FCFF forecast
| Forecast year |
Revenue growth |
NOPAT |
D&A |
Capex |
Change in NWC |
FCFF |
Present value |
| 1 |
15.00% |
HK$840.03M |
HK$120.10M |
-HK$43.44M |
HK$100.20M |
HK$1.02B |
HK$978.35M |
| 2 |
11.88% |
HK$939.78M |
HK$134.37M |
-HK$70.04M |
HK$112.10M |
HK$1.12B |
HK$994.03M |
| 3 |
8.75% |
HK$1.02B |
HK$146.12M |
-HK$99.49M |
HK$121.90M |
HK$1.19B |
HK$981.40M |
| 4 |
5.62% |
HK$1.08B |
HK$154.34M |
-HK$129.71M |
HK$128.76M |
HK$1.23B |
HK$940.73M |
| 5 |
2.50% |
HK$1.11B |
HK$158.20M |
-HK$158.20M |
HK$131.98M |
HK$1.24B |
HK$874.71M |
Step 3 — Determine the Discount Rate (WACC)
| WACC input |
Value |
| Risk-free rate |
4.71% |
| Equity risk premium assumption |
5.50% |
| Beta |
0.59 |
| Cost of equity |
7.97% |
| Pre-tax cost of debt |
22.16% |
| WACC |
8.03% |
| WACC validation |
within standard range |
Step 4 — Estimate Terminal Value
| Terminal-value input |
Value |
| Perpetuity growth rate |
2.50% |
| Terminal value |
HK$22.94B |
| Implied terminal EV / EBITDA |
14.04x |
| Terminal value as % of enterprise value |
76.57% |
Step 5 — Discount Cash Flows to Enterprise Value
| Enterprise-value component |
Value |
| Present value of explicit FCFF |
HK$4.77B |
| Present value of terminal value |
HK$15.59B |
| Indicated enterprise value |
HK$20.36B |
| 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$20.36B |
| Less: gross interest-bearing debt |
HK$86.00M |
| Add: cash and equivalents |
HK$2.79B |
| Add: affiliate investments |
HK$0.00 |
| Less: minority interests |
HK$139.96M |
| Indicated common equity value |
HK$22.93B |
Step 7 — Calculate Indicative Value Per Share
| Per-share output |
Value |
| Shares used |
1,400,338,391.00 |
| Share-count basis |
reported shares outstanding; option/RSU dilution data not separately available |
| Current market price |
HK$8.23 |
| DCF indicative value per share |
HK$16.37 |
| Indicative value vs. market price |
98.80% |
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 |
pass |
| Terminal-year FCFF is positive |
pass |
| Terminal capex converges to D&A |
pass |
| Terminal-value concentration |
within review band |
| 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 |
4/4 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 17:19:09.632034 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 |
-27.83% |
-24.80% |
| Adjusted R² |
0.15 |
0.15 |
| Annualised residual volatility |
59.07% |
58.93% |
| Factor loading (t-statistic) |
FF3 |
FF5 |
| Market excess return (Mkt-RF) |
1.48 (4.40) |
1.35 (3.71) |
| Size (SMB) |
1.87 (3.78) |
1.51 (2.42) |
| Value (HML) |
0.21 (0.45) |
0.30 (0.58) |
| Profitability (RMW) |
NM |
-0.06 (-0.09) |
| Investment (CMA) |
NM |
-0.73 (-0.98) |
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.