Intrinsic value of KT ADR - KT

Previous Close

$15.64

  Intrinsic Value

$37.13

stock screener

  Rating & Target

str. buy

+137%

Previous close

$15.64

 
Intrinsic value

$37.13

 
Up/down potential

+137%

 
Rating

str. buy

We calculate the intrinsic value of KT 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 7.6

 

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, %
  2.08
  2.90
  3.11
  3.30
  3.47
  3.62
  3.76
  3.88
  4.00
  4.10
  4.19
  4.27
  4.34
  4.41
  4.47
  4.52
  4.57
  4.61
  4.65
  4.68
  4.72
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
Revenue, $m
  19,626
  20,195
  20,823
  21,510
  22,256
  23,063
  23,930
  24,859
  25,852
  26,911
  28,038
  29,235
  30,504
  31,848
  33,270
  34,774
  36,362
  38,039
  39,808
  41,673
  43,638
  45,708
  47,889
  50,184
  52,600
  55,142
  57,816
  60,628
  63,586
  66,695
  69,964
Variable operating expenses, $m
 
  9,269
  9,557
  9,871
  10,213
  10,582
  10,979
  11,405
  11,859
  12,344
  12,860
  13,386
  13,967
  14,583
  15,234
  15,922
  16,650
  17,417
  18,227
  19,081
  19,981
  20,929
  21,928
  22,979
  24,085
  25,249
  26,473
  27,761
  29,115
  30,539
  32,035
Fixed operating expenses, $m
 
  9,906
  10,153
  10,407
  10,667
  10,934
  11,207
  11,487
  11,775
  12,069
  12,371
  12,680
  12,997
  13,322
  13,655
  13,996
  14,346
  14,705
  15,073
  15,449
  15,836
  16,231
  16,637
  17,053
  17,480
  17,917
  18,364
  18,824
  19,294
  19,776
  20,271
Total operating expenses, $m
  18,429
  19,175
  19,710
  20,278
  20,880
  21,516
  22,186
  22,892
  23,634
  24,413
  25,231
  26,066
  26,964
  27,905
  28,889
  29,918
  30,996
  32,122
  33,300
  34,530
  35,817
  37,160
  38,565
  40,032
  41,565
  43,166
  44,837
  46,585
  48,409
  50,315
  52,306
Operating income, $m
  1,197
  1,021
  1,113
  1,232
  1,376
  1,547
  1,743
  1,967
  2,218
  2,498
  2,807
  3,168
  3,539
  3,943
  4,381
  4,855
  5,366
  5,917
  6,508
  7,142
  7,821
  8,548
  9,324
  10,152
  11,036
  11,977
  12,978
  14,044
  15,177
  16,380
  17,658
EBITDA, $m
  4,150
  4,029
  4,215
  4,435
  4,690
  4,979
  5,304
  5,665
  6,064
  6,500
  6,975
  7,492
  8,050
  8,653
  9,302
  9,998
  10,744
  11,542
  12,395
  13,305
  14,275
  15,307
  16,406
  17,574
  18,815
  20,131
  21,529
  23,010
  24,580
  26,243
  28,004
Interest expense (income), $m
  321
  239
  259
  280
  303
  328
  355
  384
  416
  449
  485
  522
  563
  605
  650
  698
  748
  802
  858
  917
  980
  1,046
  1,115
  1,189
  1,266
  1,347
  1,432
  1,522
  1,616
  1,715
  1,820
Earnings before tax, $m
  973
  781
  854
  952
  1,073
  1,218
  1,388
  1,583
  1,803
  2,049
  2,323
  2,646
  2,977
  3,338
  3,731
  4,157
  4,618
  5,115
  5,650
  6,225
  6,841
  7,502
  8,209
  8,964
  9,770
  10,630
  11,546
  12,522
  13,561
  14,665
  15,838
Tax expense, $m
  285
  211
  231
  257
  290
  329
  375
  427
  487
  553
  627
  714
  804
  901
  1,007
  1,122
  1,247
  1,381
  1,525
  1,681
  1,847
  2,026
  2,216
  2,420
  2,638
  2,870
  3,118
  3,381
  3,661
  3,959
  4,276
Net income, $m
  614
  570
  624
  695
  783
  889
  1,013
  1,155
  1,316
  1,496
  1,696
  1,932
  2,173
  2,437
  2,724
  3,035
  3,371
  3,734
  4,124
  4,544
  4,994
  5,476
  5,992
  6,544
  7,132
  7,760
  8,429
  9,141
  9,899
  10,705
  11,562

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,125
  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
  26,395
  23,956
  24,701
  25,516
  26,401
  27,358
  28,386
  29,489
  30,667
  31,923
  33,260
  34,679
  36,185
  37,779
  39,466
  41,250
  43,134
  45,123
  47,221
  49,434
  51,765
  54,221
  56,808
  59,531
  62,396
  65,412
  68,583
  71,920
  75,428
  79,116
  82,994
Adjusted assets (=assets-cash), $m
  23,270
  23,956
  24,701
  25,516
  26,401
  27,358
  28,386
  29,489
  30,667
  31,923
  33,260
  34,679
  36,185
  37,779
  39,466
  41,250
  43,134
  45,123
  47,221
  49,434
  51,765
  54,221
  56,808
  59,531
  62,396
  65,412
  68,583
  71,920
  75,428
  79,116
  82,994
Revenue / Adjusted assets
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
Average production assets, $m
  15,086
  15,530
  16,013
  16,541
  17,115
  17,735
  18,402
  19,117
  19,880
  20,695
  21,561
  22,481
  23,457
  24,491
  25,585
  26,741
  27,963
  29,252
  30,612
  32,046
  33,558
  35,150
  36,826
  38,592
  40,449
  42,404
  44,460
  46,623
  48,897
  51,288
  53,802
Working capital, $m
  153
  -1,434
  -1,478
  -1,527
  -1,580
  -1,637
  -1,699
  -1,765
  -1,836
  -1,911
  -1,991
  -2,076
  -2,166
  -2,261
  -2,362
  -2,469
  -2,582
  -2,701
  -2,826
  -2,959
  -3,098
  -3,245
  -3,400
  -3,563
  -3,735
  -3,915
  -4,105
  -4,305
  -4,515
  -4,735
  -4,967
Total debt, $m
  7,008
  5,890
  6,369
  6,893
  7,462
  8,077
  8,738
  9,447
  10,205
  11,013
  11,872
  12,785
  13,753
  14,778
  15,863
  17,010
  18,221
  19,500
  20,849
  22,272
  23,771
  25,350
  27,013
  28,764
  30,607
  32,546
  34,585
  36,730
  38,986
  41,358
  43,851
Total liabilities, $m
  16,521
  15,404
  15,883
  16,407
  16,976
  17,591
  18,252
  18,961
  19,719
  20,527
  21,386
  22,299
  23,267
  24,292
  25,377
  26,524
  27,735
  29,014
  30,363
  31,786
  33,285
  34,864
  36,527
  38,278
  40,121
  42,060
  44,099
  46,244
  48,500
  50,872
  53,365
Total equity, $m
  9,873
  8,552
  8,818
  9,109
  9,425
  9,767
  10,134
  10,528
  10,948
  11,397
  11,874
  12,380
  12,918
  13,487
  14,090
  14,726
  15,399
  16,109
  16,858
  17,648
  18,480
  19,357
  20,280
  21,252
  22,275
  23,352
  24,484
  25,675
  26,928
  28,245
  29,629
Total liabilities and equity, $m
  26,394
  23,956
  24,701
  25,516
  26,401
  27,358
  28,386
  29,489
  30,667
  31,924
  33,260
  34,679
  36,185
  37,779
  39,467
  41,250
  43,134
  45,123
  47,221
  49,434
  51,765
  54,221
  56,807
  59,530
  62,396
  65,412
  68,583
  71,919
  75,428
  79,117
  82,994
Debt-to-equity ratio
  0.710
  0.690
  0.720
  0.760
  0.790
  0.830
  0.860
  0.900
  0.930
  0.970
  1.000
  1.030
  1.060
  1.100
  1.130
  1.160
  1.180
  1.210
  1.240
  1.260
  1.290
  1.310
  1.330
  1.350
  1.370
  1.390
  1.410
  1.430
  1.450
  1.460
  1.480
Adjusted equity ratio
  0.296
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357
  0.357

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  614
  570
  624
  695
  783
  889
  1,013
  1,155
  1,316
  1,496
  1,696
  1,932
  2,173
  2,437
  2,724
  3,035
  3,371
  3,734
  4,124
  4,544
  4,994
  5,476
  5,992
  6,544
  7,132
  7,760
  8,429
  9,141
  9,899
  10,705
  11,562
Depreciation, amort., depletion, $m
  2,953
  3,008
  3,101
  3,203
  3,313
  3,432
  3,561
  3,698
  3,845
  4,002
  4,168
  4,323
  4,511
  4,710
  4,920
  5,143
  5,377
  5,625
  5,887
  6,163
  6,453
  6,760
  7,082
  7,421
  7,779
  8,155
  8,550
  8,966
  9,403
  9,863
  10,347
Funds from operations, $m
  3,636
  3,579
  3,725
  3,898
  4,097
  4,322
  4,574
  4,854
  5,161
  5,498
  5,864
  6,255
  6,684
  7,147
  7,644
  8,177
  8,748
  9,359
  10,011
  10,707
  11,448
  12,236
  13,074
  13,965
  14,911
  15,915
  16,979
  18,107
  19,302
  20,568
  21,908
Change in working capital, $m
  -481
  -40
  -45
  -49
  -53
  -57
  -62
  -66
  -71
  -75
  -80
  -85
  -90
  -95
  -101
  -107
  -113
  -119
  -126
  -132
  -140
  -147
  -155
  -163
  -172
  -180
  -190
  -200
  -210
  -221
  -232
Cash from operations, $m
  4,117
  3,619
  3,770
  3,947
  4,150
  4,379
  4,636
  4,920
  5,232
  5,573
  5,944
  6,340
  6,774
  7,242
  7,745
  8,284
  8,861
  9,478
  10,137
  10,839
  11,587
  12,383
  13,229
  14,128
  15,082
  16,095
  17,169
  18,307
  19,512
  20,789
  22,140
Maintenance CAPEX, $m
  0
  -2,901
  -2,987
  -3,079
  -3,181
  -3,291
  -3,411
  -3,539
  -3,676
  -3,823
  -3,980
  -4,146
  -4,323
  -4,511
  -4,710
  -4,920
  -5,143
  -5,377
  -5,625
  -5,887
  -6,163
  -6,453
  -6,760
  -7,082
  -7,421
  -7,779
  -8,155
  -8,550
  -8,966
  -9,403
  -9,863
New CAPEX, $m
  -2,779
  -444
  -483
  -528
  -574
  -620
  -667
  -715
  -764
  -814
  -866
  -920
  -976
  -1,034
  -1,094
  -1,156
  -1,221
  -1,289
  -1,360
  -1,434
  -1,511
  -1,592
  -1,677
  -1,765
  -1,858
  -1,955
  -2,056
  -2,163
  -2,274
  -2,391
  -2,514
Cash from investing activities, $m
  -3,007
  -3,345
  -3,470
  -3,607
  -3,755
  -3,911
  -4,078
  -4,254
  -4,440
  -4,637
  -4,846
  -5,066
  -5,299
  -5,545
  -5,804
  -6,076
  -6,364
  -6,666
  -6,985
  -7,321
  -7,674
  -8,045
  -8,437
  -8,847
  -9,279
  -9,734
  -10,211
  -10,713
  -11,240
  -11,794
  -12,377
Free cash flow, $m
  1,110
  274
  300
  339
  395
  468
  558
  666
  792
  935
  1,098
  1,273
  1,475
  1,697
  1,941
  2,208
  2,497
  2,811
  3,151
  3,518
  3,913
  4,337
  4,793
  5,281
  5,803
  6,362
  6,958
  7,594
  8,272
  8,995
  9,763
Issuance/(repayment) of debt, $m
  -623
  452
  479
  524
  569
  615
  661
  709
  758
  808
  859
  913
  968
  1,025
  1,085
  1,147
  1,212
  1,279
  1,349
  1,422
  1,499
  1,579
  1,663
  1,751
  1,843
  1,939
  2,040
  2,145
  2,256
  2,372
  2,493
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  
  -655
  452
  479
  524
  569
  615
  661
  709
  758
  808
  859
  913
  968
  1,025
  1,085
  1,147
  1,212
  1,279
  1,349
  1,422
  1,499
  1,579
  1,663
  1,751
  1,843
  1,939
  2,040
  2,145
  2,256
  2,372
  2,493
Total cash flow (excl. dividends), $m
  453
  726
  779
  863
  964
  1,083
  1,220
  1,375
  1,549
  1,743
  1,957
  2,186
  2,443
  2,723
  3,026
  3,354
  3,709
  4,090
  4,500
  4,941
  5,412
  5,917
  6,456
  7,032
  7,646
  8,300
  8,998
  9,739
  10,528
  11,366
  12,257
Retained Cash Flow (-), $m
  -515
  -234
  -266
  -291
  -316
  -341
  -367
  -394
  -421
  -448
  -477
  -507
  -537
  -569
  -602
  -637
  -673
  -710
  -749
  -790
  -832
  -877
  -923
  -972
  -1,023
  -1,076
  -1,132
  -1,191
  -1,252
  -1,317
  -1,384
Prev. year cash balance distribution, $m
 
  1,555
  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
 
  2,047
  513
  572
  648
  741
  852
  981
  1,128
  1,294
  1,480
  1,679
  1,906
  2,153
  2,424
  2,718
  3,036
  3,380
  3,751
  4,151
  4,580
  5,040
  5,533
  6,060
  6,623
  7,224
  7,865
  8,548
  9,276
  10,050
  10,872
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
 
  1,962
  470
  498
  534
  575
  619
  663
  705
  744
  776
  798
  813
  819
  814
  798
  772
  735
  691
  639
  582
  521
  459
  397
  337
  281
  229
  183
  144
  110
  82
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

KT Corporation is a telecommunications service provider. The Company's segments include the Customer/Marketing Group, the Finance Business Group and the Others Group. The Customer/Marketing Group segment is engaged in providing various telecommunication services to individual/home/corporate customers and the convergence business. The Finance Business Group segment is engaged in providing various financial services, such as credit card. The Others Group segment includes security services, satellite service, information technology and network services, and satellite television services, as well as global business services, which provide global network services to multinational or domestic corporate customers and telecommunications companies. The Company's principal services include mobile voice and data telecommunications services; fixed-line services; credit card processing and other financial services, and various other services.

FINANCIAL RATIOS  of  KT ADR (KT)

Valuation Ratios
P/E Ratio 6.2
Price to Sales 0.2
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow 0.9
Price to Free Cash Flow 2.9
Growth Rates
Sales Growth Rate 2.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -8.4%
Cap. Spend. - 3 Yr. Gr. Rate -2.6%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 55.1%
Total Debt to Equity 71%
Interest Coverage 4
Management Effectiveness
Return On Assets 3.3%
Ret/ On Assets - 3 Yr. Avg. 1.4%
Return On Total Capital 3.6%
Ret/ On T. Cap. - 3 Yr. Avg. 0.6%
Return On Equity 6.4%
Return On Equity - 3 Yr. Avg. 0.7%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 99.4%
Gross Margin - 3 Yr. Avg. 99.7%
EBITDA Margin 21.6%
EBITDA Margin - 3 Yr. Avg. 19.1%
Operating Margin 6.1%
Oper. Margin - 3 Yr. Avg. 3%
Pre-Tax Margin 5%
Pre-Tax Margin - 3 Yr. Avg. 0.7%
Net Profit Margin 3.1%
Net Profit Margin - 3 Yr. Avg. 0.3%
Effective Tax Rate 29.3%
Eff/ Tax Rate - 3 Yr. Avg. 27.3%
Payout Ratio 25.9%

KT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KT stock intrinsic value calculation we used $19626 million for the last fiscal year's total revenue generated by KT ADR. The default revenue input number comes from 2016 income statement of KT 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 KT stock valuation model: a) initial revenue growth rate of 2.9% 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 KT is calculated based on our internal credit rating of KT 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 KT 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 KT stock the variable cost ratio is equal to 45.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $9664 million in the base year in the intrinsic value calculation for KT 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 4.4% for KT ADR.

Corporate tax rate of 27% is the nominal tax rate for KT 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 KT 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 KT are equal to 76.9%.

Life of production assets of 5.2 years is the average useful life of capital assets used in KT 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 KT 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 - $9873 million for KT 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 482.927 million for KT 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 KT ADR at the current share price and the inputted number of shares is $7.6 billion.

RELATED COMPANIES Price Int.Val. Rating
SKM SK Telecom ADR 28.20 15.75  sell
DCM NTT DoCoMo ADR 24.05 11.27  str.sell
TLK Telekomunikasi 31.12 62.71  str.buy
CHT Chunghwa Telec 35.13 11.73  str.sell
PHI PLDT ADR 30.00 113.13  str.buy

COMPANY NEWS

▶ ETFs with exposure to KT Corp. : December 12, 2017   [Dec-12-17 01:30PM  Capital Cube]
▶ ETFs with exposure to KT Corp. : November 30, 2017   [Nov-30-17 02:03PM  Capital Cube]
▶ ETFs with exposure to KT Corp. : October 12, 2017   [Oct-12-17 10:38AM  Capital Cube]
▶ KT Getting Closer To Key Technical Measure   [Aug-29-17 03:00AM  Investor's Business Daily]
▶ KT Corp filed its FY2016 Annual Report on Form 20-F   [May-23-17 10:24PM  PR Newswire]
▶ [$$] What JPMorgan's Telcos Guru Likes Right Now   [May-03-17 09:32PM  Barrons.com]
▶ Here Are 5 Ways to Profit From a Breakout Telecom Sector   [Jan-18-17 06:02AM  TheStreet.com]
▶ New Strong Sell Stocks for January 13th   [Jan-13-17 11:05AM  Zacks]
▶ Is HD Supply Holdings Inc (HDS) Worthy Of Your Portfolio?   [Dec-08-16 01:24PM  Insider Monkey]
▶ Is Crown Holdings, Inc. (CCK) A Good Stock To Buy?   [Dec-01-16 12:19PM  Insider Monkey]
▶ Is Crown Holdings, Inc. (CCK) A Good Stock To Buy?   [12:19PM  at Insider Monkey]
▶ What Smart Money Thinks about Qorvo Inc (QRVO)?   [11:11AM  at Insider Monkey]
▶ What Hedge Funds Think about South Korean ADRs   [Jul-31-16 05:05PM  at Insider Monkey]
▶ KT CORP Financials   [01:04PM  EDGAR Online Financials]
▶ 6 things to know about Axium Healthcares new Lake Mary HQ   [Feb-08-16 03:05PM  at bizjournals.com]
▶ Kakao, KT Corp Jump: To Open Korea's First Internet Banks   [Nov-29  09:48PM  at Barrons.com]
▶ South Korea August Exports Flash Global Trade Warning   [Sep-01  05:00PM  at Investor's Business Daily]
▶ NEC and KT to Collaborate on 5G Networks   [Aug-05  11:33PM  ACN Newswire]
▶ ZTE and KT Sign Strategic Partnership on 5G in Korea   [Jul-16  01:11AM  Business Wire]
Financial statements of KT
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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