Intrinsic value of Hanwha Q CELLS ADR - HQCL

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$6.93

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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$6.93

 
Intrinsic value

$418.09

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence* premium content

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

We calculate the intrinsic value of HQCL 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 2015), $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 0.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2015(a)
   2016
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  156.19
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,801
  2,882
  4,452
  6,658
  9,661
  13,630
  18,738
  25,151
  33,025
  42,495
  53,675
  66,652
  81,489
  98,222
  116,864
  137,412
  159,843
  184,126
  210,221
  238,086
  267,679
  298,962
  331,902
  366,474
  402,662
  440,460
  479,874
  520,921
  563,627
  608,032
  654,185
Variable operating expenses, $m
 
  2,469
  3,815
  5,706
  8,279
  11,680
  16,057
  21,553
  28,301
  36,416
  45,997
  57,117
  69,832
  84,171
  100,146
  117,754
  136,976
  157,785
  180,147
  204,026
  229,386
  256,194
  284,422
  314,048
  345,059
  377,450
  411,226
  446,400
  482,997
  521,050
  560,600
Fixed operating expenses, $m
 
  137
  141
  144
  148
  152
  155
  159
  163
  167
  172
  176
  180
  185
  189
  194
  199
  204
  209
  214
  220
  225
  231
  236
  242
  248
  255
  261
  268
  274
  281
Total operating expenses, $m
  1,674
  2,606
  3,956
  5,850
  8,427
  11,832
  16,212
  21,712
  28,464
  36,583
  46,169
  57,293
  70,012
  84,356
  100,335
  117,948
  137,175
  157,989
  180,356
  204,240
  229,606
  256,419
  284,653
  314,284
  345,301
  377,698
  411,481
  446,661
  483,265
  521,324
  560,881
Operating income, $m
  126
  275
  496
  808
  1,234
  1,798
  2,525
  3,439
  4,561
  5,912
  7,507
  9,359
  11,477
  13,866
  16,529
  19,463
  22,667
  26,136
  29,864
  33,845
  38,073
  42,543
  47,250
  52,190
  57,361
  62,762
  68,394
  74,260
  80,362
  86,708
  93,304
EBITDA, $m
  209
  407
  700
  1,113
  1,677
  2,423
  3,384
  4,591
  6,074
  7,859
  9,966
  12,413
  15,211
  18,367
  21,884
  25,760
  29,992
  34,573
  39,497
  44,755
  50,339
  56,242
  62,458
  68,982
  75,811
  82,944
  90,382
  98,129
  106,188
  114,569
  123,279
Interest expense (income), $m
  0
  30
  73
  134
  220
  337
  492
  691
  941
  1,249
  1,618
  2,054
  2,561
  3,140
  3,792
  4,520
  5,321
  6,197
  7,144
  8,162
  9,249
  10,404
  11,624
  12,910
  14,258
  15,670
  17,145
  18,683
  20,284
  21,950
  23,683
Earnings before tax, $m
  54
  244
  423
  674
  1,014
  1,461
  2,033
  2,747
  3,620
  4,663
  5,889
  7,305
  8,917
  10,727
  12,736
  14,944
  17,346
  19,940
  22,720
  25,683
  28,824
  32,139
  35,625
  39,280
  43,102
  47,092
  51,249
  55,577
  60,078
  64,758
  69,621
Tax expense, $m
  10
  66
  114
  182
  274
  394
  549
  742
  977
  1,259
  1,590
  1,972
  2,407
  2,896
  3,439
  4,035
  4,683
  5,384
  6,134
  6,934
  7,783
  8,678
  9,619
  10,606
  11,638
  12,715
  13,837
  15,006
  16,221
  17,485
  18,798
Net income, $m
  44
  178
  309
  492
  740
  1,067
  1,484
  2,006
  2,642
  3,404
  4,299
  5,333
  6,509
  7,831
  9,298
  10,909
  12,663
  14,556
  16,586
  18,749
  21,042
  23,462
  26,007
  28,674
  31,465
  34,377
  37,412
  40,571
  43,857
  47,273
  50,823

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  200
  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
  2,548
  3,757
  5,805
  8,681
  12,595
  17,770
  24,430
  32,792
  43,058
  55,405
  69,981
  86,900
  106,244
  128,060
  152,366
  179,155
  208,400
  240,059
  274,082
  310,412
  348,995
  389,781
  432,727
  477,801
  524,982
  574,263
  625,651
  679,167
  734,846
  792,740
  852,914
Adjusted assets (=assets-cash), $m
  2,348
  3,757
  5,805
  8,681
  12,595
  17,770
  24,430
  32,792
  43,058
  55,405
  69,981
  86,900
  106,244
  128,060
  152,366
  179,155
  208,400
  240,059
  274,082
  310,412
  348,995
  389,781
  432,727
  477,801
  524,982
  574,263
  625,651
  679,167
  734,846
  792,740
  852,914
Revenue / Adjusted assets
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
  0.767
Average production assets, $m
  553
  885
  1,367
  2,044
  2,966
  4,184
  5,752
  7,721
  10,139
  13,046
  16,478
  20,462
  25,017
  30,154
  35,877
  42,185
  49,072
  56,527
  64,538
  73,092
  82,178
  91,781
  101,894
  112,507
  123,617
  135,221
  147,321
  159,923
  173,034
  186,666
  200,835
Working capital, $m
  40
  412
  637
  952
  1,381
  1,949
  2,679
  3,597
  4,723
  6,077
  7,676
  9,531
  11,653
  14,046
  16,712
  19,650
  22,858
  26,330
  30,062
  34,046
  38,278
  42,752
  47,462
  52,406
  57,581
  62,986
  68,622
  74,492
  80,599
  86,949
  93,548
Total debt, $m
  1,070
  2,074
  3,825
  6,284
  9,631
  14,055
  19,749
  26,899
  35,676
  46,233
  58,696
  73,162
  89,700
  108,353
  129,135
  152,039
  177,044
  204,113
  233,202
  264,264
  297,253
  332,125
  368,844
  407,382
  447,722
  489,857
  533,794
  579,549
  627,156
  676,655
  728,103
Total liabilities, $m
  2,207
  3,212
  4,963
  7,422
  10,769
  15,193
  20,887
  28,037
  36,814
  47,371
  59,834
  74,300
  90,838
  109,491
  130,273
  153,177
  178,182
  205,251
  234,340
  265,402
  298,391
  333,263
  369,982
  408,520
  448,860
  490,995
  534,932
  580,687
  628,294
  677,793
  729,241
Total equity, $m
  340
  545
  842
  1,259
  1,826
  2,577
  3,542
  4,755
  6,243
  8,034
  10,147
  12,601
  15,405
  18,569
  22,093
  25,977
  30,218
  34,809
  39,742
  45,010
  50,604
  56,518
  62,745
  69,281
  76,122
  83,268
  90,719
  98,479
  106,553
  114,947
  123,673
Total liabilities and equity, $m
  2,547
  3,757
  5,805
  8,681
  12,595
  17,770
  24,429
  32,792
  43,057
  55,405
  69,981
  86,901
  106,243
  128,060
  152,366
  179,154
  208,400
  240,060
  274,082
  310,412
  348,995
  389,781
  432,727
  477,801
  524,982
  574,263
  625,651
  679,166
  734,847
  792,740
  852,914
Debt-to-equity ratio
  3.147
  3.810
  4.540
  4.990
  5.270
  5.450
  5.580
  5.660
  5.710
  5.750
  5.780
  5.810
  5.820
  5.840
  5.850
  5.850
  5.860
  5.860
  5.870
  5.870
  5.870
  5.880
  5.880
  5.880
  5.880
  5.880
  5.880
  5.880
  5.890
  5.890
  5.890
Adjusted equity ratio
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145
  0.145

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  44
  178
  309
  492
  740
  1,067
  1,484
  2,006
  2,642
  3,404
  4,299
  5,333
  6,509
  7,831
  9,298
  10,909
  12,663
  14,556
  16,586
  18,749
  21,042
  23,462
  26,007
  28,674
  31,465
  34,377
  37,412
  40,571
  43,857
  47,273
  50,823
Depreciation, amort., depletion, $m
  83
  132
  204
  305
  443
  625
  859
  1,153
  1,513
  1,947
  2,460
  3,054
  3,734
  4,501
  5,355
  6,296
  7,324
  8,437
  9,633
  10,909
  12,265
  13,699
  15,208
  16,792
  18,450
  20,182
  21,988
  23,869
  25,826
  27,861
  29,975
Funds from operations, $m
  354
  310
  513
  797
  1,183
  1,691
  2,343
  3,158
  4,156
  5,351
  6,758
  8,387
  10,243
  12,331
  14,652
  17,205
  19,987
  22,993
  26,218
  29,658
  33,307
  37,160
  41,215
  45,467
  49,915
  54,559
  59,400
  64,440
  69,683
  75,134
  80,799
Change in working capital, $m
  103
  155
  225
  315
  429
  568
  730
  917
  1,126
  1,354
  1,599
  1,856
  2,122
  2,393
  2,666
  2,938
  3,208
  3,472
  3,732
  3,985
  4,232
  4,473
  4,710
  4,944
  5,175
  5,405
  5,636
  5,870
  6,107
  6,350
  6,600
Cash from operations, $m
  251
  547
  289
  482
  754
  1,124
  1,612
  2,241
  3,030
  3,997
  5,160
  6,531
  8,121
  9,938
  11,987
  14,267
  16,779
  19,520
  22,487
  25,673
  29,075
  32,687
  36,504
  40,523
  44,740
  49,154
  53,764
  58,570
  63,576
  68,784
  74,199
Maintenance CAPEX, $m
  0
  -83
  -132
  -204
  -305
  -443
  -625
  -859
  -1,152
  -1,513
  -1,947
  -2,459
  -3,054
  -3,734
  -4,501
  -5,355
  -6,296
  -7,324
  -8,437
  -9,633
  -10,909
  -12,265
  -13,699
  -15,208
  -16,792
  -18,450
  -20,182
  -21,988
  -23,869
  -25,826
  -27,861
New CAPEX, $m
  0
  -332
  -482
  -677
  -922
  -1,219
  -1,568
  -1,969
  -2,417
  -2,907
  -3,432
  -3,984
  -4,555
  -5,137
  -5,723
  -6,308
  -6,886
  -7,455
  -8,011
  -8,555
  -9,085
  -9,604
  -10,113
  -10,614
  -11,110
  -11,604
  -12,100
  -12,601
  -13,111
  -13,632
  -14,169
Cash from investing activities, $m
  -172
  -415
  -614
  -881
  -1,227
  -1,662
  -2,193
  -2,828
  -3,569
  -4,420
  -5,379
  -6,443
  -7,609
  -8,871
  -10,224
  -11,663
  -13,182
  -14,779
  -16,448
  -18,188
  -19,994
  -21,869
  -23,812
  -25,822
  -27,902
  -30,054
  -32,282
  -34,589
  -36,980
  -39,458
  -42,030
Free cash flow, $m
  79
  133
  -326
  -399
  -473
  -538
  -580
  -587
  -540
  -424
  -220
  87
  512
  1,068
  1,763
  2,604
  3,596
  4,741
  6,039
  7,486
  9,081
  10,818
  12,693
  14,701
  16,838
  19,099
  21,481
  23,981
  26,596
  29,326
  32,169
Issuance/(repayment) of debt, $m
  -9
  1,204
  1,751
  2,459
  3,347
  4,424
  5,694
  7,150
  8,777
  10,557
  12,462
  14,466
  16,539
  18,652
  20,782
  22,905
  25,005
  27,069
  29,089
  31,062
  32,989
  34,872
  36,719
  38,538
  40,340
  42,135
  43,936
  45,756
  47,606
  49,500
  51,448
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  
  -17
  1,204
  1,751
  2,459
  3,347
  4,424
  5,694
  7,150
  8,777
  10,557
  12,462
  14,466
  16,539
  18,652
  20,782
  22,905
  25,005
  27,069
  29,089
  31,062
  32,989
  34,872
  36,719
  38,538
  40,340
  42,135
  43,936
  45,756
  47,606
  49,500
  51,448
Total cash flow (excl. dividends), $m
  43
  1,337
  1,425
  2,060
  2,874
  3,887
  5,114
  6,563
  8,237
  10,133
  12,243
  14,554
  17,051
  19,720
  22,544
  25,509
  28,601
  31,810
  35,128
  38,548
  42,069
  45,690
  49,412
  53,240
  57,178
  61,235
  65,418
  69,737
  74,202
  78,825
  83,617
Retained Cash Flow (-), $m
  -110
  -205
  -297
  -417
  -568
  -750
  -966
  -1,213
  -1,489
  -1,790
  -2,114
  -2,453
  -2,805
  -3,163
  -3,524
  -3,884
  -4,241
  -4,591
  -4,933
  -5,268
  -5,595
  -5,914
  -6,227
  -6,536
  -6,841
  -7,146
  -7,451
  -7,760
  -8,074
  -8,395
  -8,725
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
 
  1,132
  1,128
  1,643
  2,306
  3,137
  4,148
  5,351
  6,749
  8,343
  10,129
  12,100
  14,246
  16,557
  19,020
  21,624
  24,361
  27,220
  30,195
  33,281
  36,475
  39,776
  43,185
  46,704
  50,337
  54,089
  57,967
  61,977
  66,129
  70,430
  74,892
Discount rate, %
 
  9.30
  9.77
  10.25
  10.77
  11.30
  11.87
  12.46
  13.09
  13.74
  14.43
  15.15
  15.91
  16.70
  17.54
  18.41
  19.33
  20.30
  21.32
  22.38
  23.50
  24.68
  25.91
  27.20
  28.57
  29.99
  31.49
  33.07
  34.72
  36.46
  38.28
PV of cash for distribution, $m
 
  1,036
  936
  1,226
  1,532
  1,836
  2,116
  2,351
  2,523
  2,619
  2,632
  2,564
  2,423
  2,223
  1,981
  1,714
  1,440
  1,176
  932
  717
  535
  387
  272
  184
  121
  77
  47
  28
  16
  9
  4
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

Hanwha Q CELLS Co., Ltd., a solar energy company, develops, manufactures, and sells solar cells and photovoltaic (PV) modules in the United States, Europe, South Korea, Japan, the People’s Republic of China, India, Turkey, and internationally. Its principal products include PV cells, PV modules, silicon ingots, and silicon wafers. The company also develops and builds solar power projects, and sells them to third-party purchasers; and offers engineering, procurement, and construction, as well as operation and management services comprising inspections, repair and replacement of plant equipment, site management, and administrative support services. It serves solar power system integrators and distributors through third party distributors. The company is headquartered in Seoul, South Korea. Hanwha Q CELLS Co., Ltd. operates as a subsidiary of Hanwha Solar Holdings Co., Ltd.

FINANCIAL RATIOS  of  Hanwha Q CELLS ADR (HQCL)

Valuation Ratios
P/E Ratio 655.3
Price to Sales 16
Price to Book 84.8
Price to Tangible Book
Price to Cash Flow 114.9
Price to Free Cash Flow 114.9
Growth Rates
Sales Growth Rate 156.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -100%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 192.1%
Total Debt to Equity 314.7%
Interest Coverage 0
Management Effectiveness
Return On Assets 2.7%
Ret/ On Assets - 3 Yr. Avg. -3.7%
Return On Total Capital 4.6%
Ret/ On T. Cap. - 3 Yr. Avg. -6.7%
Return On Equity 15.4%
Return On Equity - 3 Yr. Avg. -19.4%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 18.5%
Gross Margin - 3 Yr. Avg. 11.4%
EBITDA Margin 7.6%
EBITDA Margin - 3 Yr. Avg. 2.1%
Operating Margin 7.1%
Oper. Margin - 3 Yr. Avg. -2%
Pre-Tax Margin 3%
Pre-Tax Margin - 3 Yr. Avg. -7.8%
Net Profit Margin 2.4%
Net Profit Margin - 3 Yr. Avg. -9.7%
Effective Tax Rate 18.5%
Eff/ Tax Rate - 3 Yr. Avg. -6.8%
Payout Ratio 0%

HQCL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HQCL stock intrinsic value calculation we used $1801 million for the last fiscal year's total revenue generated by Hanwha Q CELLS ADR. The default revenue input number comes from 2015 income statement of Hanwha Q CELLS 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 HQCL stock valuation model: a) initial revenue growth rate of 60% 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 9.3%, whose default value for HQCL is calculated based on our internal credit rating of Hanwha Q CELLS 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 Hanwha Q CELLS 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 HQCL stock the variable cost ratio is equal to 85.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $134 million in the base year in the intrinsic value calculation for HQCL 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 Hanwha Q CELLS ADR.

Corporate tax rate of 27% is the nominal tax rate for Hanwha Q CELLS 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 HQCL 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 HQCL are equal to 30.7%.

Life of production assets of 6.7 years is the average useful life of capital assets used in Hanwha Q CELLS 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 HQCL is equal to 14.3%. 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 - $340 million for Hanwha Q CELLS 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 85.298 million for Hanwha Q CELLS 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 Hanwha Q CELLS ADR at the current share price and the inputted number of shares is $0.6 billion.


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COMPANY NEWS

▶ Chinese Solar Manufacturers Are Their Own Worst Enemies   [Mar-28-17 03:23PM  Motley Fool]
▶ Hanwha Q CELLS to Attend 29th Annual ROTH Conference   [Mar-06-17 04:30PM  PR Newswire]
▶ 3 Solar Stocks to Watch in 2016   [Jul-26-16 08:08AM  at Motley Fool]
▶ Storm Damage Could Impact on Canadian Solar's Bottom Line   [Jun-28-16 05:36PM  at Motley Fool]
▶ 2 Cheap Tech Stocks You Can Buy Today   [03:38PM  at Motley Fool]
▶ HANWHA Q CELLS CO., LTD. Financials   [01:04PM  EDGAR Online Financials]
▶ Hanwha Q CELLS Files its 2015 Annual Report on Form 20-F   [Apr-27-16 05:20PM  PR Newswire]
▶ Tesla Rising With Solar ETFs As Key Vote Looms   [Dec-17  06:16PM  at Investor's Business Daily]
▶ [$$] Solar Tax Credit Faces Cloudier Outlook   [Dec-09  11:02AM  at Barrons.com]
Stock chart of HQCL Financial statements of HQCL
Valuation of Stocks

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