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2. Company Fundamentals

2.1 Competitiveness

Metric	Value
Operating Margins	1.72%
Profit Margins	0.78%
Return on Equity	107.13%
Return on Assets	3.49%
Free Float	0.18B
Dividend Yield	0.84%
Short Int % Utilisation	3.22%

2.2 Growth

Metric	Value
Revenue Growth	3.8%
Free Cash Flow	-0.32B
EBITDA	12.79 (Ratio)
Enterprise Value	67.82B
EV/Revenue	0.21
EV/EBITDA	12.79

Revenue growth of 3.8% suggests mature or challenged top-line momentum.

2.3 Management

Role	Metric
Consensus Rating	N/A

2.4 Return

Metric	Value
Expected Return (Ann.)*	13.62%
Risk / Std Dev (Ann.)*	31.69%
1-Year Price Return*	7.78%

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

Metric	Value
Last Price	$313.82
52-Week Range	$244.82 – $377.54
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	$321.33B	$293.96B
Net income	Reported net income	$1.55B	$1.51B
Total assets	Year-end reported balance	$76.59B	$67.10B
Shareholders’ equity	Year-end reported balance	$1.51B	$645.94M
Net margin	Net income ÷ revenue	0.48%	0.51%
Asset turnover	Revenue ÷ total assets	4.1955x	4.3808x
Equity multiplier	Total assets ÷ shareholders’ equity	50.7886x	103.8825x
ROE	Net margin × asset turnover × equity multiplier	103.06%	233.63%

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	$321.33B
Prior annual revenue	$293.96B
EBIT	$2.68B
Tax rate	30.58%
NOPAT = EBIT × (1 − tax rate)	$1.86B
Forecast start-growth basis	9.31%
Forecast policy	latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block	Value
NOPAT	$1.86B
Add: depreciation & amortisation	$1.07B
Less: capital expenditure	-$667.98M
Less/(add): working-capital cash-flow movement	$35.42M
Current unlevered FCFF	$2.30B

Explicit FCFF forecast

Forecast year	Revenue growth	NOPAT	D&A	Capex	Change in NWC	FCFF	Present value
1	9.31%	$2.03B	$1.17B	-$730.19M	$38.72M	$2.51B	$2.42B
2	7.61%	$2.19B	$1.26B	-$903.50M	$41.67M	$2.58B	$2.32B
3	5.91%	$2.32B	$1.33B	-$1.08B	$44.13M	$2.61B	$2.18B
4	4.20%	$2.41B	$1.39B	-$1.26B	$45.99M	$2.59B	$2.01B
5	2.50%	$2.47B	$1.42B	-$1.42B	$47.13M	$2.52B	$1.82B

Step 3 — Determine the Discount Rate (WACC)

WACC input	Value
Risk-free rate	4.71%
Equity risk premium assumption	5.50%
Beta	0.57
Cost of equity	7.86%
Pre-tax cost of debt	6.97%
WACC	7.53%
WACC validation	within standard range

Step 4 — Estimate Terminal Value

Terminal-value input	Value
Perpetuity growth rate	2.50%
Terminal value	$51.42B
Implied terminal EV / EBITDA	10.31x
Terminal value as % of enterprise value	76.91%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component	Value
Present value of explicit FCFF	$10.74B
Present value of terminal value	$35.77B
Indicated enterprise value	$46.51B
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	$46.51B
Less: gross interest-bearing debt	$7.66B
Add: cash and equivalents	$4.36B
Add: affiliate investments	$0.00
Less: minority interests	$239.07M
Indicated common equity value	$42.97B

Step 7 — Calculate Indicative Value Per Share

Per-share output	Value
Shares used	195,214,000.00
Share-count basis	reported diluted weighted-average shares
Current market price	$319.59
DCF indicative value per share	$220.10
Indicative value vs. market price	-31.13%

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 17:27:59.871626 UTC; latest reported fiscal period: 2025-09-30 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	-1.69%	3.31%
Adjusted R²	-0.01	-0.01
Annualised residual volatility	31.54%	31.44%

Factor loading (t-statistic)	FF3	FF5
Market excess return (Mkt-RF)	-0.14 (-0.74)	-0.04 (-0.20)
Size (SMB)	0.20 (0.79)	0.28 (1.03)
Value (HML)	0.05 (0.25)	0.05 (0.17)
Profitability (RMW)	NM	0.26 (1.16)
Investment (CMA)	NM	-0.12 (-0.31)

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.