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2. Company Fundamentals

2.1 Competitiveness

Metric	Value
Operating Margins	32.16%
Profit Margins	5.79%
Return on Assets	10.03%
Free Float	1.76B
Dividend Yield	2.73%
Short Int % Utilisation	1.46%

2.2 Growth

Metric	Value
Revenue Growth	12.4%
Free Cash Flow	20.81B
EBITDA	15.41 (Ratio)
Enterprise Value	461.01B
EV/Revenue	7.34
EV/EBITDA	15.41

Revenue growth of 12.4% indicates steady, moderate expansion.

2.3 Management

Role	Metric
Consensus Rating	N/A

2.4 Return

Metric	Value
Expected Return (Ann.)*	28.93%
Risk / Std Dev (Ann.)*	26.09%
1-Year Price Return*	24.44%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric	Value
Last Price	$249.46
52-Week Range	$190.75 – $267.47
Observation Count	251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

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 US$. 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	$61.16B	$56.33B
Net income	Reported net income	$4.19B	$4.24B
Total assets	Year-end reported balance	$133.96B	$135.16B
Shareholders’ equity	Year-end reported balance	$-3.27B	$3.33B
Net margin	Net income ÷ revenue	6.84%	7.52%
Asset turnover	Revenue ÷ total assets	0.4566x	0.4168x
Equity multiplier	Total assets ÷ shareholders’ equity	-40.9664x	40.6499x
ROE	Net margin × asset turnover × equity multiplier	-128.01%	127.46%

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	$61.16B
Prior annual revenue	$56.33B
EBIT	$9.49B
Tax rate	35.83%
NOPAT = EBIT × (1 − tax rate)	$6.09B
Forecast start-growth basis	8.57%
Forecast policy	latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block	Value
NOPAT	$6.09B
Add: depreciation & amortisation	$8.14B
Less: capital expenditure	-$1.21B
Less/(add): working-capital cash-flow movement	-$2.36B
Current unlevered FCFF	$10.65B

Explicit FCFF forecast

Forecast year	Revenue growth	NOPAT	D&A	Capex	Change in NWC	FCFF	Present value
1	8.57%	$6.61B	$8.84B	-$1.32B	-$2.56B	$11.56B	$11.24B
2	7.05%	$7.08B	$9.46B	-$3.42B	-$2.75B	$10.37B	$9.53B
3	5.53%	$7.47B	$9.98B	-$5.74B	-$2.90B	$8.82B	$7.66B
4	4.02%	$7.77B	$10.38B	-$8.17B	-$3.01B	$6.96B	$5.72B
5	2.50%	$7.96B	$10.64B	-$10.64B	-$3.09B	$4.87B	$3.78B

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	6.25%
Pre-tax cost of debt	4.30%
WACC	5.80%
WACC validation	requires assumption review

Step 4 — Estimate Terminal Value

Terminal-value input	Value
Perpetuity growth rate	2.50%
Terminal value	$151.36B
Implied terminal EV / EBITDA	6.57x
Terminal value as % of enterprise value	75.06%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component	Value
Present value of explicit FCFF	$37.93B
Present value of terminal value	$114.17B
Indicated enterprise value	$152.10B
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	$152.10B
Less: gross interest-bearing debt	$67.50B
Add: cash and equivalents	$5.26B
Add: affiliate investments	$0.00
Less: minority interests	$42.00M
Indicated common equity value	$89.82B

Step 7 — Calculate Indicative Value Per Share

Per-share output	Value
Shares used	1,773,000,000.00
Share-count basis	reported diluted weighted-average shares
Current market price	$257.64
DCF indicative value per share	$50.66
Indicative value vs. market price	-80.34%

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	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	3/4 evidenced checks
Lynch-inspired balance-and-growth checks	3/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:20:24.089078 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	US
Factor-return currency	USD
Issuer-return basis	USD adjusted total return
Estimation window	2025-08-19 to 2026-06-30
Aligned daily observations	217
Minimum observation requirement	120
Currency conversion for HK listings	not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic	FF3	FF5
Annualised alpha	24.56%	33.76%
Adjusted R²	-0.01	0.03
Annualised residual volatility	26.21%	25.60%

Factor loading (t-statistic)	FF3	FF5
Market excess return (Mkt-RF)	0.01 (0.09)	0.19 (1.12)
Size (SMB)	0.24 (1.14)	0.06 (0.27)
Value (HML)	0.04 (0.24)	-0.36 (-1.65)
Profitability (RMW)	NM	0.07 (0.38)
Investment (CMA)	NM	0.95 (3.00)

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.