Intrinsic value of China Auto Logistics - CALI

Previous Close

$3.37

  Intrinsic Value

$273.83

stock screener

  Rating & Target

str. buy

+999%

Previous close

$3.37

 
Intrinsic value

$273.83

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CALI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  4.71
  30.20
  27.68
  25.41
  23.37
  21.53
  19.88
  18.39
  17.05
  15.85
  14.76
  13.79
  12.91
  12.12
  11.41
  10.76
  10.19
  9.67
  9.20
  8.78
  8.40
  8.06
  7.76
  7.48
  7.23
  7.01
  6.81
  6.63
  6.47
  6.32
  6.19
Revenue, $m
  467
  608
  776
  974
  1,201
  1,460
  1,750
  2,072
  2,425
  2,810
  3,224
  3,669
  4,142
  4,644
  5,174
  5,731
  6,315
  6,926
  7,563
  8,227
  8,919
  9,638
  10,386
  11,163
  11,970
  12,809
  13,681
  14,588
  15,531
  16,513
  17,534
Variable operating expenses, $m
 
  405
  517
  648
  800
  972
  1,166
  1,380
  1,615
  1,871
  2,147
  2,443
  2,759
  3,093
  3,446
  3,817
  4,206
  4,613
  5,037
  5,479
  5,940
  6,419
  6,917
  7,434
  7,972
  8,531
  9,112
  9,716
  10,344
  10,997
  11,678
Fixed operating expenses, $m
 
  164
  168
  172
  177
  181
  186
  190
  195
  200
  205
  210
  215
  221
  226
  232
  238
  243
  250
  256
  262
  269
  275
  282
  289
  297
  304
  312
  319
  327
  336
Total operating expenses, $m
  467
  569
  685
  820
  977
  1,153
  1,352
  1,570
  1,810
  2,071
  2,352
  2,653
  2,974
  3,314
  3,672
  4,049
  4,444
  4,856
  5,287
  5,735
  6,202
  6,688
  7,192
  7,716
  8,261
  8,828
  9,416
  10,028
  10,663
  11,324
  12,014
Operating income, $m
  0
  39
  91
  153
  225
  307
  399
  502
  615
  739
  872
  1,015
  1,168
  1,331
  1,502
  1,682
  1,872
  2,070
  2,277
  2,492
  2,717
  2,950
  3,193
  3,446
  3,709
  3,982
  4,265
  4,561
  4,868
  5,188
  5,521
EBITDA, $m
  0
  39
  91
  153
  225
  307
  399
  502
  615
  739
  872
  1,015
  1,168
  1,331
  1,502
  1,682
  1,872
  2,070
  2,277
  2,492
  2,717
  2,950
  3,193
  3,446
  3,709
  3,982
  4,265
  4,561
  4,868
  5,188
  5,521
Interest expense (income), $m
  6
  4
  6
  8
  11
  14
  17
  21
  25
  30
  35
  40
  46
  52
  59
  66
  73
  81
  89
  97
  106
  115
  125
  135
  145
  156
  167
  178
  190
  203
  216
Earnings before tax, $m
  -1
  35
  86
  145
  214
  293
  382
  481
  590
  709
  837
  975
  1,122
  1,278
  1,443
  1,617
  1,798
  1,989
  2,187
  2,395
  2,610
  2,835
  3,068
  3,311
  3,564
  3,826
  4,099
  4,383
  4,678
  4,985
  5,305
Tax expense, $m
  0
  10
  23
  39
  58
  79
  103
  130
  159
  191
  226
  263
  303
  345
  390
  436
  486
  537
  591
  647
  705
  765
  828
  894
  962
  1,033
  1,107
  1,183
  1,263
  1,346
  1,432
Net income, $m
  4
  26
  62
  106
  156
  214
  279
  351
  431
  518
  611
  712
  819
  933
  1,053
  1,180
  1,313
  1,452
  1,597
  1,748
  1,906
  2,070
  2,240
  2,417
  2,601
  2,793
  2,992
  3,199
  3,415
  3,639
  3,873

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  161
  206
  263
  329
  406
  494
  592
  701
  820
  950
  1,091
  1,241
  1,401
  1,571
  1,750
  1,939
  2,136
  2,343
  2,559
  2,783
  3,017
  3,260
  3,513
  3,776
  4,049
  4,333
  4,628
  4,935
  5,254
  5,586
  5,932
Adjusted assets (=assets-cash), $m
  158
  206
  263
  329
  406
  494
  592
  701
  820
  950
  1,091
  1,241
  1,401
  1,571
  1,750
  1,939
  2,136
  2,343
  2,559
  2,783
  3,017
  3,260
  3,513
  3,776
  4,049
  4,333
  4,628
  4,935
  5,254
  5,586
  5,932
Revenue / Adjusted assets
  2.956
  2.951
  2.951
  2.960
  2.958
  2.955
  2.956
  2.956
  2.957
  2.958
  2.955
  2.956
  2.956
  2.956
  2.957
  2.956
  2.956
  2.956
  2.955
  2.956
  2.956
  2.956
  2.956
  2.956
  2.956
  2.956
  2.956
  2.956
  2.956
  2.956
  2.956
Average production assets, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Working capital, $m
  23
  138
  176
  221
  273
  331
  397
  470
  551
  638
  732
  833
  940
  1,054
  1,175
  1,301
  1,434
  1,572
  1,717
  1,868
  2,025
  2,188
  2,358
  2,534
  2,717
  2,908
  3,106
  3,311
  3,526
  3,748
  3,980
Total debt, $m
  86
  123
  172
  228
  294
  368
  451
  543
  645
  755
  874
  1,002
  1,137
  1,281
  1,433
  1,593
  1,761
  1,936
  2,119
  2,309
  2,508
  2,714
  2,928
  3,151
  3,383
  3,624
  3,874
  4,134
  4,405
  4,686
  4,979
Total liabilities, $m
  137
  174
  223
  279
  345
  419
  502
  594
  696
  806
  925
  1,053
  1,188
  1,332
  1,484
  1,644
  1,812
  1,987
  2,170
  2,360
  2,559
  2,765
  2,979
  3,202
  3,434
  3,675
  3,925
  4,185
  4,456
  4,737
  5,030
Total equity, $m
  24
  31
  40
  50
  62
  75
  90
  107
  125
  144
  166
  189
  213
  239
  266
  295
  325
  356
  389
  423
  459
  496
  534
  574
  616
  659
  704
  750
  799
  849
  902
Total liabilities and equity, $m
  161
  205
  263
  329
  407
  494
  592
  701
  821
  950
  1,091
  1,242
  1,401
  1,571
  1,750
  1,939
  2,137
  2,343
  2,559
  2,783
  3,018
  3,261
  3,513
  3,776
  4,050
  4,334
  4,629
  4,935
  5,255
  5,586
  5,932
Debt-to-equity ratio
  3.583
  3.950
  4.300
  4.560
  4.750
  4.900
  5.010
  5.100
  5.170
  5.230
  5.270
  5.310
  5.340
  5.370
  5.390
  5.410
  5.420
  5.440
  5.450
  5.460
  5.470
  5.480
  5.480
  5.490
  5.500
  5.500
  5.510
  5.510
  5.520
  5.520
  5.520
Adjusted equity ratio
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4
  26
  62
  106
  156
  214
  279
  351
  431
  518
  611
  712
  819
  933
  1,053
  1,180
  1,313
  1,452
  1,597
  1,748
  1,906
  2,070
  2,240
  2,417
  2,601
  2,793
  2,992
  3,199
  3,415
  3,639
  3,873
Depreciation, amort., depletion, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Funds from operations, $m
  -99
  26
  62
  106
  156
  214
  279
  351
  431
  518
  611
  712
  819
  933
  1,053
  1,180
  1,313
  1,452
  1,597
  1,748
  1,906
  2,070
  2,240
  2,417
  2,601
  2,793
  2,992
  3,199
  3,415
  3,639
  3,873
Change in working capital, $m
  -49
  32
  38
  45
  52
  59
  66
  73
  80
  87
  94
  101
  108
  114
  120
  126
  133
  139
  145
  151
  157
  163
  170
  176
  183
  190
  198
  206
  214
  223
  232
Cash from operations, $m
  -50
  -6
  24
  61
  105
  155
  213
  278
  351
  430
  517
  611
  712
  819
  933
  1,054
  1,180
  1,313
  1,452
  1,597
  1,749
  1,906
  2,070
  2,241
  2,418
  2,602
  2,794
  2,993
  3,201
  3,416
  3,641
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
New CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from investing activities, $m
  21
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Free cash flow, $m
  -29
  -6
  24
  61
  105
  155
  213
  278
  351
  430
  517
  611
  712
  819
  933
  1,054
  1,180
  1,313
  1,452
  1,597
  1,749
  1,906
  2,070
  2,241
  2,418
  2,602
  2,794
  2,993
  3,201
  3,416
  3,641
Issuance/(repayment) of debt, $m
  25
  40
  48
  57
  65
  74
  83
  92
  101
  110
  119
  128
  136
  144
  152
  160
  168
  175
  183
  191
  198
  206
  214
  223
  232
  241
  250
  260
  271
  282
  293
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  25
  40
  48
  57
  65
  74
  83
  92
  101
  110
  119
  128
  136
  144
  152
  160
  168
  175
  183
  191
  198
  206
  214
  223
  232
  241
  250
  260
  271
  282
  293
Total cash flow (excl. dividends), $m
  -4
  34
  73
  118
  170
  229
  296
  370
  452
  541
  636
  739
  848
  963
  1,085
  1,213
  1,348
  1,488
  1,635
  1,788
  1,947
  2,113
  2,285
  2,464
  2,650
  2,843
  3,044
  3,254
  3,471
  3,698
  3,934
Retained Cash Flow (-), $m
  -3
  -7
  -9
  -10
  -12
  -13
  -15
  -17
  -18
  -20
  -21
  -23
  -24
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -38
  -40
  -42
  -43
  -45
  -47
  -48
  -50
  -53
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  27
  64
  108
  158
  216
  281
  354
  434
  521
  615
  716
  823
  937
  1,058
  1,185
  1,318
  1,457
  1,602
  1,754
  1,911
  2,076
  2,246
  2,424
  2,608
  2,800
  2,999
  3,207
  3,423
  3,647
  3,881
Discount rate, %
 
  12.70
  13.34
  14.00
  14.70
  15.44
  16.21
  17.02
  17.87
  18.76
  19.70
  20.69
  21.72
  22.81
  23.95
  25.15
  26.40
  27.72
  29.11
  30.56
  32.09
  33.70
  35.38
  37.15
  39.01
  40.96
  43.01
  45.16
  47.41
  49.79
  52.27
PV of cash for distribution, $m
 
  24
  50
  73
  91
  105
  114
  118
  116
  111
  102
  90
  78
  65
  52
  41
  31
  23
  16
  11
  7
  5
  3
  2
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

China Auto Logistics Inc., formerly Fresh Ideas Media, Inc. is engaged in providing imported automobile sales and trading service, and a Web-based automobile sales and trading information platform to its customers. The Company operates through four segments: sales of automobiles, financing services, airport auto mall automotive services and other services. The Company conducts its sales operations of imported automobiles primarily through its subsidiaries, Tianjin Binhai Shisheng Trading Group Co., Ltd. and Tianjin Zhonghe Auto Sales Service Co., Ltd. (Zhonghe). Its financing services include letter of credit issuance services, purchase deposit financing, and import duty advance services. Zhonghe operates approximately two businesses, including selling used cars through Car King Tianjin, and leasing a portion of the Airport International Auto Mall. The Company's other services include revenue generated from Web-based Advertising.

FINANCIAL RATIOS  of  China Auto Logistics (CALI)

Valuation Ratios
P/E Ratio 3.4
Price to Sales 0
Price to Book 0.6
Price to Tangible Book
Price to Cash Flow -0.3
Price to Free Cash Flow -0.3
Growth Rates
Sales Growth Rate 4.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 0%
Total Debt to Equity 358.3%
Interest Coverage 1
Management Effectiveness
Return On Assets 4.5%
Ret/ On Assets - 3 Yr. Avg. -0.7%
Return On Total Capital 2.6%
Ret/ On T. Cap. - 3 Yr. Avg. -6.5%
Return On Equity 17.8%
Return On Equity - 3 Yr. Avg. -26.9%
Asset Turnover 2.1
Profitability Ratios
Gross Margin 0.6%
Gross Margin - 3 Yr. Avg. 0.8%
EBITDA Margin 1.1%
EBITDA Margin - 3 Yr. Avg. -0.7%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. -2.3%
Pre-Tax Margin -0.2%
Pre-Tax Margin - 3 Yr. Avg. -3.1%
Net Profit Margin 0.9%
Net Profit Margin - 3 Yr. Avg. -2.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -2.5%
Payout Ratio 0%

CALI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CALI stock intrinsic value calculation we used $467 million for the last fiscal year's total revenue generated by China Auto Logistics. The default revenue input number comes from 2016 income statement of China Auto Logistics. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CALI stock valuation model: a) initial revenue growth rate of 30.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 12.7%, whose default value for CALI is calculated based on our internal credit rating of China Auto Logistics, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of China Auto Logistics.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CALI stock the variable cost ratio is equal to 66.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $160 million in the base year in the intrinsic value calculation for CALI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4.6% for China Auto Logistics.

Corporate tax rate of 27% is the nominal tax rate for China Auto Logistics. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CALI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CALI are equal to 0%.

Life of production assets of 10 years is the average useful life of capital assets used in China Auto Logistics operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CALI is equal to 22.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $24 million for China Auto Logistics - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 4.857 million for China Auto Logistics is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of China Auto Logistics at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating

COMPANY NEWS

▶ Is China Auto Logistics Incs (NASDAQ:CALI) CEO Pay Fair?   [Jan-23-18 06:03PM  Simply Wall St.]
▶ Who Really Owns China Auto Logistics Inc (NASDAQ:CALI)?   [Jan-02-18 05:29PM  Simply Wall St.]
▶ China Auto Logistics, Inc. to Host Earnings Call   [Nov-15-17 06:45AM  ACCESSWIRE]
▶ China Auto Logistics Reports 2017 First Quarter Results   [May-15-17 07:30AM  Marketwired]
▶ It's Time to Look Under the Hood of China's CAR   [Mar-15  10:14PM  at The Wall Street Journal]
▶ 3 Stocks Pushing The Specialty Retail Industry Lower   [Oct-17  04:32PM  at TheStreet]
▶ 3 Wholesale Stocks Pushing The Industry Higher   [Oct-15  04:33PM  at TheStreet]
Financial statements of CALI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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