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2. Company Fundamentals

2.1 Competitiveness

Metric	Value
Operating Margins	0.64%
Profit Margins	3.07%
Return on Equity	14.55%
Return on Assets	3.8%
Free Float	0.4B
Dividend Yield	2.96%
Short Int % Utilisation	2.24%

2.2 Growth

Metric	Value
Revenue Growth	6.9%
Free Cash Flow	-1.13B
EBITDA	13.63 (Ratio)
Enterprise Value	95.98B
EV/Revenue	0.71
EV/EBITDA	13.63

Revenue growth of 6.9% indicates steady, moderate expansion.

2.3 Management

Role	Metric
Consensus Rating	N/A

2.4 Return

Metric	Value
Expected Return (Ann.)*	106.07%
Risk / Std Dev (Ann.)*	30.97%
1-Year Price Return*	95.47%

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

Metric	Value
Last Price	$233.61
52-Week Range	$121.24 – $236.10
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	$132.38B	$143.15B
Net income	Reported net income	$4.39B	$2.11B
Total assets	Year-end reported balance	$73.68B	$72.58B
Shareholders’ equity	Year-end reported balance	$29.09B	$27.41B
Net margin	Net income ÷ revenue	3.32%	1.47%
Asset turnover	Revenue ÷ total assets	1.7966x	1.9723x
Equity multiplier	Total assets ÷ shareholders’ equity	2.5326x	2.6482x
ROE	Net margin × asset turnover × equity multiplier	15.10%	7.69%

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	$132.38B
Prior annual revenue	$143.15B
EBIT	$6.51B
Tax rate	16.46%
NOPAT = EBIT × (1 − tax rate)	$5.44B
Forecast start-growth basis	-7.53%
Forecast policy	latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block	Value
NOPAT	$5.44B
Add: depreciation & amortisation	$3.25B
Less: capital expenditure	-$2.23B
Less/(add): working-capital cash-flow movement	-$1.18B
Current unlevered FCFF	$5.27B

Explicit FCFF forecast

Forecast year	Revenue growth	NOPAT	D&A	Capex	Change in NWC	FCFF	Present value
1	-7.53%	$5.03B	$3.01B	-$2.06B	-$1.09B	$4.88B	$4.70B
2	-5.02%	$4.77B	$2.86B	-$2.18B	-$1.04B	$4.41B	$3.94B
3	-2.51%	$4.65B	$2.78B	-$2.35B	-$1.01B	$4.08B	$3.38B
4	-0.01%	$4.65B	$2.78B	-$2.57B	-$1.01B	$3.86B	$2.97B
5	2.50%	$4.77B	$2.85B	-$2.85B	-$1.04B	$3.73B	$2.66B

Step 3 — Determine the Discount Rate (WACC)

WACC input	Value
Risk-free rate	4.71%
Equity risk premium assumption	5.50%
Beta	0.69
Cost of equity	8.49%
Pre-tax cost of debt	5.46%
WACC	7.82%
WACC validation	within standard range

Step 4 — Estimate Terminal Value

Terminal-value input	Value
Perpetuity growth rate	2.50%
Terminal value	$71.90B
Implied terminal EV / EBITDA	8.40x
Terminal value as % of enterprise value	73.67%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component	Value
Present value of explicit FCFF	$17.64B
Present value of terminal value	$49.34B
Indicated enterprise value	$66.97B
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	$66.97B
Less: gross interest-bearing debt	$19.72B
Add: cash and equivalents	$1.12B
Add: affiliate investments	$0.00
Less: minority interests	$1.15B
Indicated common equity value	$47.22B

Step 7 — Calculate Indicative Value Per Share

Per-share output	Value
Shares used	408,053,000.00
Share-count basis	reported diluted weighted-average shares
Current market price	$241.20
DCF indicative value per share	$115.73
Indicative value vs. market price	-52.02%

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	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 17:46:47.919903 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	21.96%	16.68%
Adjusted R²	0.12	0.12
Annualised residual volatility	28.23%	28.12%

Factor loading (t-statistic)	FF3	FF5
Market excess return (Mkt-RF)	0.17 (1.01)	0.09 (0.45)
Size (SMB)	0.07 (0.31)	-0.02 (-0.08)
Value (HML)	0.98 (5.09)	0.97 (4.06)
Profitability (RMW)	NM	-0.25 (-1.25)
Investment (CMA)	NM	0.18 (0.51)

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.