Intrinsic value of Chunghwa Telecom ADR - CHT

Previous Close

$33.77

  Intrinsic Value

$11.66

stock screener

  Rating & Target

str. sell

-65%

  Value-price divergence*

+2730%

Previous close

$33.77

 
Intrinsic value

$11.66

 
Up/down potential

-65%

 
Rating

str. sell

 
Value-price divergence*

+2730%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CHT 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

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 26.4

 

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, %
  -0.78
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  7,394
  7,542
  7,715
  7,914
  8,136
  8,383
  8,654
  8,948
  9,267
  9,611
  9,980
  10,374
  10,795
  11,244
  11,720
  12,226
  12,762
  13,329
  13,928
  14,562
  15,231
  15,937
  16,682
  17,467
  18,293
  19,164
  20,081
  21,046
  22,062
  23,131
  24,254
Variable operating expenses, $m
 
  5,905
  6,041
  6,196
  6,371
  6,564
  6,776
  7,006
  7,256
  7,525
  7,814
  8,122
  8,452
  8,803
  9,176
  9,572
  9,991
  10,435
  10,905
  11,401
  11,925
  12,477
  13,060
  13,675
  14,322
  15,004
  15,722
  16,477
  17,273
  18,109
  18,989
Fixed operating expenses, $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
Total operating expenses, $m
  5,866
  5,905
  6,041
  6,196
  6,371
  6,564
  6,776
  7,006
  7,256
  7,525
  7,814
  8,122
  8,452
  8,803
  9,176
  9,572
  9,991
  10,435
  10,905
  11,401
  11,925
  12,477
  13,060
  13,675
  14,322
  15,004
  15,722
  16,477
  17,273
  18,109
  18,989
Operating income, $m
  1,528
  1,637
  1,674
  1,717
  1,766
  1,819
  1,878
  1,942
  2,011
  2,086
  2,166
  2,252
  2,344
  2,441
  2,544
  2,654
  2,770
  2,894
  3,024
  3,161
  3,307
  3,460
  3,622
  3,792
  3,971
  4,160
  4,360
  4,569
  4,790
  5,022
  5,265
EBITDA, $m
  2,573
  2,702
  2,764
  2,835
  2,914
  3,003
  3,100
  3,205
  3,320
  3,443
  3,575
  3,716
  3,867
  4,028
  4,198
  4,379
  4,571
  4,774
  4,989
  5,216
  5,456
  5,709
  5,976
  6,257
  6,553
  6,865
  7,193
  7,539
  7,903
  8,285
  8,688
Interest expense (income), $m
  1
  2
  4
  6
  8
  11
  14
  18
  21
  25
  30
  34
  39
  44
  50
  56
  62
  69
  76
  84
  91
  100
  109
  118
  128
  138
  149
  161
  173
  185
  199
Earnings before tax, $m
  1,588
  1,635
  1,671
  1,712
  1,757
  1,808
  1,864
  1,924
  1,990
  2,061
  2,136
  2,218
  2,305
  2,397
  2,494
  2,598
  2,708
  2,825
  2,948
  3,078
  3,215
  3,360
  3,513
  3,674
  3,844
  4,022
  4,210
  4,408
  4,617
  4,836
  5,067
Tax expense, $m
  262
  441
  451
  462
  474
  488
  503
  520
  537
  556
  577
  599
  622
  647
  673
  702
  731
  763
  796
  831
  868
  907
  948
  992
  1,038
  1,086
  1,137
  1,190
  1,247
  1,306
  1,368
Net income, $m
  1,288
  1,193
  1,220
  1,249
  1,283
  1,320
  1,361
  1,405
  1,453
  1,504
  1,560
  1,619
  1,682
  1,750
  1,821
  1,897
  1,977
  2,062
  2,152
  2,247
  2,347
  2,453
  2,564
  2,682
  2,806
  2,936
  3,074
  3,218
  3,370
  3,530
  3,699

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,224
  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
  14,375
  13,420
  13,728
  14,081
  14,477
  14,916
  15,398
  15,922
  16,490
  17,101
  17,758
  18,460
  19,209
  20,007
  20,854
  21,754
  22,707
  23,717
  24,784
  25,911
  27,102
  28,358
  29,683
  31,079
  32,551
  34,100
  35,732
  37,449
  39,256
  41,158
  43,157
Adjusted assets (=assets-cash), $m
  13,151
  13,420
  13,728
  14,081
  14,477
  14,916
  15,398
  15,922
  16,490
  17,101
  17,758
  18,460
  19,209
  20,007
  20,854
  21,754
  22,707
  23,717
  24,784
  25,911
  27,102
  28,358
  29,683
  31,079
  32,551
  34,100
  35,732
  37,449
  39,256
  41,158
  43,157
Revenue / Adjusted assets
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
  0.562
Average production assets, $m
  11,268
  11,494
  11,758
  12,060
  12,400
  12,776
  13,188
  13,637
  14,123
  14,647
  15,209
  15,811
  16,452
  17,135
  17,862
  18,632
  19,449
  20,313
  21,227
  22,193
  23,212
  24,288
  25,423
  26,619
  27,879
  29,207
  30,604
  32,075
  33,623
  35,251
  36,964
Working capital, $m
  692
  -535
  -548
  -562
  -578
  -595
  -614
  -635
  -658
  -682
  -709
  -737
  -766
  -798
  -832
  -868
  -906
  -946
  -989
  -1,034
  -1,081
  -1,132
  -1,184
  -1,240
  -1,299
  -1,361
  -1,426
  -1,494
  -1,566
  -1,642
  -1,722
Total debt, $m
  56
  103
  165
  236
  316
  404
  501
  606
  720
  843
  975
  1,116
  1,267
  1,427
  1,598
  1,779
  1,970
  2,173
  2,388
  2,614
  2,853
  3,106
  3,372
  3,653
  3,949
  4,260
  4,588
  4,933
  5,297
  5,679
  6,081
Total liabilities, $m
  2,650
  2,697
  2,759
  2,830
  2,910
  2,998
  3,095
  3,200
  3,314
  3,437
  3,569
  3,710
  3,861
  4,021
  4,192
  4,373
  4,564
  4,767
  4,982
  5,208
  5,447
  5,700
  5,966
  6,247
  6,543
  6,854
  7,182
  7,527
  7,891
  8,273
  8,675
Total equity, $m
  11,725
  10,722
  10,969
  11,251
  11,567
  11,918
  12,303
  12,722
  13,175
  13,664
  14,188
  14,749
  15,348
  15,985
  16,663
  17,381
  18,143
  18,950
  19,802
  20,703
  21,654
  22,658
  23,717
  24,832
  26,008
  27,246
  28,550
  29,922
  31,366
  32,885
  34,483
Total liabilities and equity, $m
  14,375
  13,419
  13,728
  14,081
  14,477
  14,916
  15,398
  15,922
  16,489
  17,101
  17,757
  18,459
  19,209
  20,006
  20,855
  21,754
  22,707
  23,717
  24,784
  25,911
  27,101
  28,358
  29,683
  31,079
  32,551
  34,100
  35,732
  37,449
  39,257
  41,158
  43,158
Debt-to-equity ratio
  0.005
  0.010
  0.020
  0.020
  0.030
  0.030
  0.040
  0.050
  0.050
  0.060
  0.070
  0.080
  0.080
  0.090
  0.100
  0.100
  0.110
  0.110
  0.120
  0.130
  0.130
  0.140
  0.140
  0.150
  0.150
  0.160
  0.160
  0.160
  0.170
  0.170
  0.180
Adjusted equity ratio
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,288
  1,193
  1,220
  1,249
  1,283
  1,320
  1,361
  1,405
  1,453
  1,504
  1,560
  1,619
  1,682
  1,750
  1,821
  1,897
  1,977
  2,062
  2,152
  2,247
  2,347
  2,453
  2,564
  2,682
  2,806
  2,936
  3,074
  3,218
  3,370
  3,530
  3,699
Depreciation, amort., depletion, $m
  1,045
  1,065
  1,089
  1,117
  1,149
  1,184
  1,222
  1,263
  1,308
  1,357
  1,409
  1,464
  1,523
  1,587
  1,654
  1,725
  1,801
  1,881
  1,965
  2,055
  2,149
  2,249
  2,354
  2,465
  2,581
  2,704
  2,834
  2,970
  3,113
  3,264
  3,423
Funds from operations, $m
  1,509
  2,258
  2,309
  2,367
  2,432
  2,504
  2,582
  2,668
  2,761
  2,861
  2,968
  3,083
  3,206
  3,336
  3,475
  3,622
  3,778
  3,943
  4,117
  4,302
  4,496
  4,702
  4,918
  5,147
  5,387
  5,641
  5,907
  6,188
  6,484
  6,794
  7,121
Change in working capital, $m
  -579
  -10
  -12
  -14
  -16
  -18
  -19
  -21
  -23
  -24
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -69
  -72
  -76
  -80
Cash from operations, $m
  2,088
  2,269
  2,321
  2,381
  2,447
  2,521
  2,602
  2,689
  2,784
  2,886
  2,995
  3,111
  3,236
  3,368
  3,509
  3,658
  3,816
  3,983
  4,160
  4,347
  4,544
  4,752
  4,971
  5,202
  5,446
  5,702
  5,972
  6,257
  6,556
  6,870
  7,201
Maintenance CAPEX, $m
  0
  -1,043
  -1,064
  -1,089
  -1,117
  -1,148
  -1,183
  -1,221
  -1,263
  -1,308
  -1,356
  -1,408
  -1,464
  -1,523
  -1,587
  -1,654
  -1,725
  -1,801
  -1,881
  -1,965
  -2,055
  -2,149
  -2,249
  -2,354
  -2,465
  -2,581
  -2,704
  -2,834
  -2,970
  -3,113
  -3,264
New CAPEX, $m
  -765
  -226
  -264
  -302
  -339
  -376
  -412
  -449
  -486
  -524
  -562
  -601
  -642
  -683
  -726
  -770
  -817
  -864
  -914
  -966
  -1,020
  -1,076
  -1,135
  -1,196
  -1,260
  -1,327
  -1,397
  -1,471
  -1,548
  -1,628
  -1,713
Cash from investing activities, $m
  -696
  -1,269
  -1,328
  -1,391
  -1,456
  -1,524
  -1,595
  -1,670
  -1,749
  -1,832
  -1,918
  -2,009
  -2,106
  -2,206
  -2,313
  -2,424
  -2,542
  -2,665
  -2,795
  -2,931
  -3,075
  -3,225
  -3,384
  -3,550
  -3,725
  -3,908
  -4,101
  -4,305
  -4,518
  -4,741
  -4,977
Free cash flow, $m
  1,392
  999
  993
  990
  992
  997
  1,006
  1,019
  1,035
  1,054
  1,076
  1,102
  1,130
  1,161
  1,196
  1,233
  1,274
  1,318
  1,365
  1,415
  1,469
  1,527
  1,588
  1,652
  1,721
  1,794
  1,871
  1,952
  2,038
  2,129
  2,224
Issuance/(repayment) of debt, $m
  -4
  51
  62
  71
  80
  88
  97
  105
  114
  123
  132
  141
  151
  160
  170
  181
  192
  203
  215
  227
  239
  253
  266
  281
  296
  311
  328
  345
  363
  382
  402
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  
  1
  51
  62
  71
  80
  88
  97
  105
  114
  123
  132
  141
  151
  160
  170
  181
  192
  203
  215
  227
  239
  253
  266
  281
  296
  311
  328
  345
  363
  382
  402
Total cash flow (excl. dividends), $m
  1,395
  1,051
  1,055
  1,061
  1,071
  1,085
  1,103
  1,124
  1,149
  1,177
  1,208
  1,243
  1,281
  1,322
  1,366
  1,414
  1,466
  1,521
  1,580
  1,642
  1,709
  1,779
  1,854
  1,933
  2,017
  2,105
  2,199
  2,297
  2,401
  2,511
  2,626
Retained Cash Flow (-), $m
  130
  -217
  -247
  -282
  -316
  -351
  -385
  -419
  -454
  -489
  -524
  -561
  -599
  -637
  -677
  -719
  -762
  -806
  -853
  -901
  -951
  -1,004
  -1,059
  -1,116
  -1,176
  -1,238
  -1,304
  -1,372
  -1,444
  -1,519
  -1,598
Prev. year cash balance distribution, $m
 
  1,220
  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
 
  2,053
  808
  779
  755
  735
  718
  705
  695
  688
  684
  682
  682
  684
  689
  695
  704
  714
  727
  741
  757
  775
  795
  817
  841
  867
  895
  925
  957
  992
  1,029
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  1,969
  740
  678
  621
  569
  521
  476
  435
  395
  359
  324
  291
  260
  231
  204
  179
  155
  134
  114
  96
  80
  66
  54
  43
  34
  26
  20
  15
  11
  8
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

Chunghwa Telecom Co., Ltd. provides telecommunication services primarily in Taiwan. The company’s Domestic Fixed Communications Business segment provides local telephone, domestic long distance telephone, broadband access, local and domestic long distance leased line, Wi-Fi, and multimedia on demand services; and other domestic services, including information and communication technology (ICT), corporate solution services, and cloud computing services. This segment also offers interconnection with its fixed-line network to other mobile and fixed-line operators. Its Mobile Communications Business segment provides mobile services, and ICT and other mobile services; and sells mobile handsets, tablets, and data cards. The company’s Internet Business segment provides Internet service provider, Internet value-added, data communication, Internet data center, and ICT and other Internet services. Its International Fixed Communications Business segment offers international long distance telephone, international leased line, international data, satellite, and ICT and other international services. The company’s Other Business segment sells properties. Chunghwa Telecom Co., Ltd. was founded in 1996 and is headquartered in Taipei, Taiwan.

FINANCIAL RATIOS  of  Chunghwa Telecom ADR (CHT)

Valuation Ratios
P/E Ratio 203.4
Price to Sales 35.4
Price to Book 22.3
Price to Tangible Book
Price to Cash Flow 125.5
Price to Free Cash Flow 198
Growth Rates
Sales Growth Rate -0.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -32.9%
Cap. Spend. - 3 Yr. Gr. Rate -20.8%
Financial Strength
Quick Ratio 306
Current Ratio 0
LT Debt to Equity 0.4%
Total Debt to Equity 0.5%
Interest Coverage 1589
Management Effectiveness
Return On Assets 8.9%
Ret/ On Assets - 3 Yr. Avg. 9%
Return On Total Capital 10.9%
Ret/ On T. Cap. - 3 Yr. Avg. 11%
Return On Equity 10.9%
Return On Equity - 3 Yr. Avg. 11.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 35.8%
Gross Margin - 3 Yr. Avg. 35.5%
EBITDA Margin 35.6%
EBITDA Margin - 3 Yr. Avg. 36%
Operating Margin 20.7%
Oper. Margin - 3 Yr. Avg. 20.7%
Pre-Tax Margin 21.5%
Pre-Tax Margin - 3 Yr. Avg. 21.5%
Net Profit Margin 17.4%
Net Profit Margin - 3 Yr. Avg. 17.6%
Effective Tax Rate 16.5%
Eff/ Tax Rate - 3 Yr. Avg. 16.1%
Payout Ratio 106.2%

CHT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CHT stock intrinsic value calculation we used $7394 million for the last fiscal year's total revenue generated by Chunghwa Telecom ADR. The default revenue input number comes from 2016 income statement of Chunghwa Telecom ADR. 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 CHT stock valuation model: a) initial revenue growth rate of 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 4.3%, whose default value for CHT is calculated based on our internal credit rating of Chunghwa Telecom ADR, 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 Chunghwa Telecom ADR.
    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 CHT stock the variable cost ratio is equal to 78.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CHT 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 3.5% for Chunghwa Telecom ADR.

Corporate tax rate of 27% is the nominal tax rate for Chunghwa Telecom ADR. 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 CHT 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 CHT are equal to 152.4%.

Life of production assets of 10.8 years is the average useful life of capital assets used in Chunghwa Telecom ADR 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 CHT is equal to -7.1%. 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 - $11725 million for Chunghwa Telecom ADR - 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 782.569 million for Chunghwa Telecom ADR 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 Chunghwa Telecom ADR at the current share price and the inputted number of shares is $26.4 billion.

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COMPANY NEWS

▶ Chunghwa Telecom Announces Management Changes   [Aug-08-17 08:12AM  PR Newswire]
▶ Chunghwa posts 2Q profit   [01:31AM  Associated Press]
▶ Top Ranked Income Stocks to Buy for July 20th   [Jul-20-17 11:55AM  Zacks]
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▶ New Strong Buy Stocks for May 31st   [May-31-17 09:27AM  Zacks]
▶ Chunghwa Telecom Announces Senior Management Changes   [May-26-17 05:00AM  PR Newswire]
▶ Chunghwa posts 1Q profit   [Apr-27-17 05:00AM  Associated Press]
▶ Chunghwa Telecom 2016 Form 20-F filed with the U.S. SEC   [Apr-25-17 08:00AM  PR Newswire]
▶ Why These 7 Stocks Are Poised to Explode   [Feb-03-17 09:58AM  TheStreet.com]
▶ Chunghwa posts 4Q profit   [Jan-25-17 05:01AM  Associated Press]
▶ Chunghwa Telecom Reports 2017 Guidance   [Jan-24-17 03:14AM  PR Newswire]
▶ New Strong Sell Stocks for January 9th   [Jan-09-17 08:47AM  Zacks]
▶ Chunghwa Telecom Announces Chairman and CEO Change   [Dec-15-16 03:19AM  PR Newswire]
▶ Is Royal Bank of Scotland Group PLC (RBS) A Good Stock To Buy?   [Dec-11-16 05:39AM  at Insider Monkey]
▶ How Credit Suisse Group AG (ADR) (CS) Stacks Up Against Its Peers   [Dec-10-16 02:46PM  at Insider Monkey]
▶ CHUNGHWA TELECOM CO LTD Financials   [01:04PM  EDGAR Online Financials]
▶ Chunghwa Telecom 2015 Form 20-F filed with the U.S. SEC   [Apr-27-16 08:00AM  PR Newswire]
▶ Chunghwa Telecom Reports 2016 Guidance   [Jan-27-16 04:27AM  PR Newswire]
▶ Is PPG Industries, Inc. (PPG) A Good Stock To Buy?   [Nov-30  07:01PM  at Insider Monkey]
▶ Is Kellogg Company (K) A Good Stock To Buy?   [Nov-25  03:36PM  at Insider Monkey]
▶ Francis Chou Doubles Stake in AstraZeneca   [Aug-11  06:38PM  Gurufocus]
Stock chart of CHT Financial statements of CHT
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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