Intrinsic value of Hanwha Q CELLS ADR - HQCL

Previous Close

$7.04

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$7.04

 
Intrinsic value premium content
 
Up/down potential premium content
 
Rating premium content
 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying

*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 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 0.6

 

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, %
  34.70
  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
  2,426
  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
 
  136
  140
  143
  147
  150
  154
  158
  162
  166
  170
  175
  179
  183
  188
  193
  197
  202
  207
  213
  218
  223
  229
  235
  241
  247
  253
  259
  266
  272
  279
Total operating expenses, $m
  2,234
  2,605
  3,955
  5,849
  8,426
  11,830
  16,211
  21,711
  28,463
  36,582
  46,167
  57,292
  70,011
  84,354
  100,334
  117,947
  137,173
  157,987
  180,354
  204,239
  229,604
  256,417
  284,651
  314,283
  345,300
  377,697
  411,479
  446,659
  483,263
  521,322
  560,879
Operating income, $m
  192
  276
  497
  809
  1,235
  1,799
  2,526
  3,440
  4,562
  5,913
  7,508
  9,360
  11,479
  13,868
  16,530
  19,465
  22,669
  26,138
  29,866
  33,847
  38,075
  42,545
  47,251
  52,191
  57,362
  62,764
  68,396
  74,262
  80,364
  86,710
  93,306
EBITDA, $m
  286
  408
  701
  1,114
  1,678
  2,424
  3,385
  4,592
  6,076
  7,860
  9,968
  12,415
  15,212
  18,368
  21,885
  25,761
  29,993
  34,575
  39,498
  44,756
  50,340
  56,244
  62,459
  68,984
  75,813
  82,946
  90,384
  98,131
  106,190
  114,571
  123,281
Interest expense (income), $m
  55
  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
  123
  245
  424
  675
  1,015
  1,462
  2,034
  2,749
  3,621
  4,664
  5,890
  7,306
  8,918
  10,728
  12,738
  14,945
  17,348
  19,941
  22,722
  25,685
  28,826
  32,141
  35,627
  39,282
  43,104
  47,093
  51,251
  55,579
  60,080
  64,760
  69,623
Tax expense, $m
  -5
  66
  115
  182
  274
  395
  549
  742
  978
  1,259
  1,590
  1,973
  2,408
  2,897
  3,439
  4,035
  4,684
  5,384
  6,135
  6,935
  7,783
  8,678
  9,619
  10,606
  11,638
  12,715
  13,838
  15,006
  16,222
  17,485
  18,798
Net income, $m
  128
  179
  310
  493
  741
  1,067
  1,485
  2,006
  2,643
  3,405
  4,300
  5,333
  6,510
  7,832
  9,299
  10,910
  12,664
  14,557
  16,587
  18,750
  21,043
  23,463
  26,008
  28,676
  31,466
  34,378
  37,413
  40,572
  43,859
  47,275
  50,825

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  390
  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
  2,209
  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
  1,819
  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
  1.334
  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
  883
  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
  222
  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
  1,172
  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
  1,801
  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
  408
  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
  2,209
  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
  2.873
  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
  0.217
  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
  128
  179
  310
  493
  741
  1,067
  1,485
  2,006
  2,643
  3,405
  4,300
  5,333
  6,510
  7,832
  9,299
  10,910
  12,664
  14,557
  16,587
  18,750
  21,043
  23,463
  26,008
  28,676
  31,466
  34,378
  37,413
  40,572
  43,859
  47,275
  50,825
Depreciation, amort., depletion, $m
  94
  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
  31
  311
  514
  798
  1,184
  1,692
  2,344
  3,159
  4,157
  5,352
  6,759
  8,388
  10,244
  12,332
  14,653
  17,206
  19,988
  22,994
  26,219
  29,659
  33,308
  37,162
  41,216
  45,468
  49,916
  54,560
  59,401
  64,442
  69,684
  75,135
  80,800
Change in working capital, $m
  -106
  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
  137
  548
  289
  483
  754
  1,124
  1,613
  2,242
  3,031
  3,998
  5,161
  6,532
  8,122
  9,939
  11,988
  14,268
  16,780
  19,521
  22,488
  25,675
  29,076
  32,688
  36,505
  40,524
  44,741
  49,155
  53,765
  58,572
  63,577
  68,785
  74,200
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
  -21
  -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
  116
  134
  -325
  -399
  -472
  -537
  -579
  -586
  -539
  -423
  -219
  88
  513
  1,069
  1,764
  2,605
  3,598
  4,743
  6,040
  7,487
  9,082
  10,819
  12,694
  14,703
  16,840
  19,101
  21,483
  23,982
  26,598
  29,327
  32,171
Issuance/(repayment) of debt, $m
  117
  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  
  117
  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
  190
  1,338
  1,426
  2,061
  2,875
  3,888
  5,115
  6,564
  8,238
  10,134
  12,244
  14,555
  17,052
  19,721
  22,545
  25,510
  28,602
  31,811
  35,129
  38,550
  42,070
  45,691
  49,413
  53,241
  57,179
  61,236
  65,419
  69,738
  74,204
  78,827
  83,619
Retained Cash Flow (-), $m
  -68
  -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
 
  1,133
  1,129
  1,643
  2,307
  3,137
  4,149
  5,351
  6,750
  8,344
  10,130
  12,101
  14,247
  16,558
  19,021
  21,626
  24,362
  27,221
  30,196
  33,282
  36,476
  39,777
  43,186
  46,705
  50,338
  54,090
  57,968
  61,978
  66,130
  70,432
  74,894
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
 
  1,037
  937
  1,226
  1,533
  1,837
  2,117
  2,352
  2,524
  2,619
  2,632
  2,564
  2,424
  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 228.9
Price to Sales 12.1
Price to Book 71.8
Price to Tangible Book
Price to Cash Flow 213.8
Price to Free Cash Flow 213.8
Growth Rates
Sales Growth Rate 34.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 157.8%
Total Debt to Equity 287.3%
Interest Coverage 3
Management Effectiveness
Return On Assets 7.8%
Ret/ On Assets - 3 Yr. Avg. 1.2%
Return On Total Capital 8.6%
Ret/ On T. Cap. - 3 Yr. Avg. 0.3%
Return On Equity 34.2%
Return On Equity - 3 Yr. Avg. 4.5%
Asset Turnover 1
Profitability Ratios
Gross Margin 18.1%
Gross Margin - 3 Yr. Avg. 15.1%
EBITDA Margin 11.2%
EBITDA Margin - 3 Yr. Avg. 5.9%
Operating Margin 7.9%
Oper. Margin - 3 Yr. Avg. 3.6%
Pre-Tax Margin 5.1%
Pre-Tax Margin - 3 Yr. Avg. -1.7%
Net Profit Margin 5.3%
Net Profit Margin - 3 Yr. Avg. -1.7%
Effective Tax Rate -4.1%
Eff/ Tax Rate - 3 Yr. Avg. 5.5%
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 2016 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 $133 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 81.136 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.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
CSIQ Canadian Solar 15.07 prem.  prem.
JKS JinkoSolar Hol 20.26 prem.  prem.
JASO JA Solar Holdi 6.45 prem.  prem.
TSL Trina Solar AD 10.87 prem.  prem.
FSLR First Solar 38.42 prem.  prem.
TOT Total ADR 49.33 prem.  prem.
RUN SunRun 6.65 prem.  prem.
NEE NextEra Energy 141.59 prem.  prem.

COMPANY NEWS

▶ Solar Manufacturers Face a Tough Market in 2017   [Jun-08-17 01:39PM  Motley Fool]
▶ Hanwha Q CELLS Reports First Quarter 2017 Results   [May-25-17 07:00AM  PR Newswire]
▶ Hanwha Q CELLS Files its 2016 Annual Report on Form 20-F   [May-01-17 07:00AM  PR Newswire]
▶ 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 Annual reports of HQCL
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.