Intrinsic value of Sky Solar Holdings ADR - SKYS

Previous Close

$1.35

  Intrinsic Value

$0.58

stock screener

  Rating & Target

str. sell

-57%

  Value-price divergence*

+27%

Previous close

$1.35

 
Intrinsic value

$0.58

 
Up/down potential

-57%

 
Rating

str. sell

 
Value-price divergence*

+27%

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

We calculate the intrinsic value of SKYS 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 0.1

 

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, %
  42.42
  42.40
  38.66
  35.29
  32.26
  29.54
  27.08
  24.88
  22.89
  21.10
  19.49
  18.04
  16.74
  15.56
  14.51
  13.56
  12.70
  11.93
  11.24
  10.61
  10.05
  9.55
  9.09
  8.68
  8.31
  7.98
  7.68
  7.42
  7.17
  6.96
  6.76
Revenue, $m
  47
  67
  93
  126
  166
  215
  273
  341
  420
  508
  607
  717
  837
  967
  1,107
  1,257
  1,417
  1,586
  1,764
  1,951
  2,147
  2,352
  2,566
  2,789
  3,021
  3,262
  3,512
  3,773
  4,044
  4,325
  4,617
Variable operating expenses, $m
 
  192
  267
  361
  477
  618
  785
  980
  1,205
  1,459
  1,743
  2,058
  2,402
  2,776
  3,179
  3,610
  4,069
  4,554
  5,066
  5,603
  6,167
  6,755
  7,369
  8,009
  8,675
  9,368
  10,088
  10,836
  11,613
  12,421
  13,261
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
  45
  192
  267
  361
  477
  618
  785
  980
  1,205
  1,459
  1,743
  2,058
  2,402
  2,776
  3,179
  3,610
  4,069
  4,554
  5,066
  5,603
  6,167
  6,755
  7,369
  8,009
  8,675
  9,368
  10,088
  10,836
  11,613
  12,421
  13,261
Operating income, $m
  3
  -125
  -174
  -235
  -311
  -403
  -512
  -639
  -785
  -951
  -1,136
  -1,341
  -1,566
  -1,810
  -2,072
  -2,353
  -2,652
  -2,968
  -3,302
  -3,652
  -4,019
  -4,403
  -4,804
  -5,221
  -5,655
  -6,106
  -6,575
  -7,063
  -7,570
  -8,096
  -8,644
EBITDA, $m
  13
  -111
  -154
  -208
  -276
  -357
  -454
  -566
  -696
  -843
  -1,007
  -1,189
  -1,388
  -1,604
  -1,837
  -2,086
  -2,351
  -2,631
  -2,927
  -3,237
  -3,563
  -3,903
  -4,258
  -4,627
  -5,012
  -5,412
  -5,828
  -6,260
  -6,709
  -7,176
  -7,661
Interest expense (income), $m
  4
  4
  10
  16
  25
  35
  48
  63
  81
  101
  124
  150
  179
  210
  244
  280
  319
  361
  405
  451
  500
  551
  604
  660
  718
  778
  841
  906
  974
  1,044
  1,117
Earnings before tax, $m
  -2
  -130
  -183
  -251
  -336
  -438
  -560
  -702
  -866
  -1,052
  -1,261
  -1,492
  -1,745
  -2,019
  -2,316
  -2,633
  -2,971
  -3,329
  -3,707
  -4,103
  -4,519
  -4,954
  -5,408
  -5,880
  -6,372
  -6,884
  -7,416
  -7,969
  -8,543
  -9,140
  -9,761
Tax expense, $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
Net income, $m
  -1
  -130
  -183
  -251
  -336
  -438
  -560
  -702
  -866
  -1,052
  -1,261
  -1,492
  -1,745
  -2,019
  -2,316
  -2,633
  -2,971
  -3,329
  -3,707
  -4,103
  -4,519
  -4,954
  -5,408
  -5,880
  -6,372
  -6,884
  -7,416
  -7,969
  -8,543
  -9,140
  -9,761

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  27
  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
  361
  475
  658
  890
  1,178
  1,526
  1,939
  2,421
  2,975
  3,603
  4,305
  5,082
  5,933
  6,856
  7,851
  8,915
  10,047
  11,246
  12,509
  13,837
  15,228
  16,682
  18,198
  19,779
  21,423
  23,133
  24,911
  26,759
  28,679
  30,674
  32,748
Adjusted assets (=assets-cash), $m
  334
  475
  658
  890
  1,178
  1,526
  1,939
  2,421
  2,975
  3,603
  4,305
  5,082
  5,933
  6,856
  7,851
  8,915
  10,047
  11,246
  12,509
  13,837
  15,228
  16,682
  18,198
  19,779
  21,423
  23,133
  24,911
  26,759
  28,679
  30,674
  32,748
Revenue / Adjusted assets
  0.141
  0.141
  0.141
  0.142
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
  0.141
Average production assets, $m
  221
  315
  436
  590
  781
  1,011
  1,285
  1,605
  1,973
  2,389
  2,854
  3,369
  3,933
  4,545
  5,205
  5,910
  6,661
  7,456
  8,293
  9,174
  10,096
  11,060
  12,065
  13,113
  14,203
  15,337
  16,516
  17,741
  19,013
  20,336
  21,711
Working capital, $m
  7
  -4
  -6
  -8
  -11
  -14
  -17
  -22
  -27
  -33
  -39
  -46
  -54
  -62
  -71
  -80
  -91
  -101
  -113
  -125
  -137
  -151
  -164
  -178
  -193
  -209
  -225
  -241
  -259
  -277
  -296
Total debt, $m
  101
  181
  308
  469
  668
  909
  1,195
  1,528
  1,912
  2,346
  2,832
  3,370
  3,958
  4,597
  5,286
  6,022
  6,805
  7,635
  8,509
  9,428
  10,391
  11,397
  12,446
  13,540
  14,678
  15,861
  17,092
  18,370
  19,699
  21,079
  22,515
Total liabilities, $m
  248
  328
  455
  616
  815
  1,056
  1,342
  1,675
  2,059
  2,493
  2,979
  3,517
  4,105
  4,744
  5,433
  6,169
  6,952
  7,782
  8,656
  9,575
  10,538
  11,544
  12,593
  13,687
  14,825
  16,008
  17,239
  18,517
  19,846
  21,226
  22,662
Total equity, $m
  113
  146
  203
  274
  363
  470
  597
  746
  916
  1,110
  1,326
  1,565
  1,827
  2,112
  2,418
  2,746
  3,094
  3,464
  3,853
  4,262
  4,690
  5,138
  5,605
  6,092
  6,598
  7,125
  7,673
  8,242
  8,833
  9,448
  10,086
Total liabilities and equity, $m
  361
  474
  658
  890
  1,178
  1,526
  1,939
  2,421
  2,975
  3,603
  4,305
  5,082
  5,932
  6,856
  7,851
  8,915
  10,046
  11,246
  12,509
  13,837
  15,228
  16,682
  18,198
  19,779
  21,423
  23,133
  24,912
  26,759
  28,679
  30,674
  32,748
Debt-to-equity ratio
  0.894
  1.240
  1.520
  1.710
  1.840
  1.930
  2.000
  2.050
  2.090
  2.110
  2.140
  2.150
  2.170
  2.180
  2.190
  2.190
  2.200
  2.200
  2.210
  2.210
  2.220
  2.220
  2.220
  2.220
  2.220
  2.230
  2.230
  2.230
  2.230
  2.230
  2.230
Adjusted equity ratio
  0.257
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1
  -130
  -183
  -251
  -336
  -438
  -560
  -702
  -866
  -1,052
  -1,261
  -1,492
  -1,745
  -2,019
  -2,316
  -2,633
  -2,971
  -3,329
  -3,707
  -4,103
  -4,519
  -4,954
  -5,408
  -5,880
  -6,372
  -6,884
  -7,416
  -7,969
  -8,543
  -9,140
  -9,761
Depreciation, amort., depletion, $m
  10
  14
  20
  27
  35
  46
  58
  73
  89
  108
  129
  152
  178
  206
  236
  267
  301
  337
  375
  415
  457
  500
  546
  593
  643
  694
  747
  803
  860
  920
  982
Funds from operations, $m
  -9
  -116
  -164
  -225
  -300
  -392
  -502
  -630
  -777
  -944
  -1,132
  -1,339
  -1,567
  -1,814
  -2,080
  -2,366
  -2,670
  -2,992
  -3,331
  -3,688
  -4,062
  -4,453
  -4,862
  -5,287
  -5,730
  -6,190
  -6,669
  -7,166
  -7,683
  -8,220
  -8,779
Change in working capital, $m
  -13
  -1
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -6
  -6
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
Cash from operations, $m
  4
  -114
  -162
  -223
  -298
  -389
  -498
  -625
  -772
  -939
  -1,125
  -1,332
  -1,559
  -1,805
  -2,071
  -2,356
  -2,659
  -2,981
  -3,320
  -3,676
  -4,050
  -4,440
  -4,848
  -5,273
  -5,715
  -6,175
  -6,653
  -7,149
  -7,666
  -8,202
  -8,760
Maintenance CAPEX, $m
  0
  -10
  -14
  -20
  -27
  -35
  -46
  -58
  -73
  -89
  -108
  -129
  -152
  -178
  -206
  -236
  -267
  -301
  -337
  -375
  -415
  -457
  -500
  -546
  -593
  -643
  -694
  -747
  -803
  -860
  -920
New CAPEX, $m
  -101
  -94
  -122
  -154
  -190
  -231
  -274
  -320
  -367
  -416
  -466
  -515
  -564
  -612
  -659
  -706
  -751
  -795
  -838
  -880
  -922
  -964
  -1,006
  -1,048
  -1,090
  -1,134
  -1,179
  -1,225
  -1,273
  -1,323
  -1,375
Cash from investing activities, $m
  -111
  -104
  -136
  -174
  -217
  -266
  -320
  -378
  -440
  -505
  -574
  -644
  -716
  -790
  -865
  -942
  -1,018
  -1,096
  -1,175
  -1,255
  -1,337
  -1,421
  -1,506
  -1,594
  -1,683
  -1,777
  -1,873
  -1,972
  -2,076
  -2,183
  -2,295
Free cash flow, $m
  -107
  -218
  -298
  -396
  -515
  -655
  -818
  -1,003
  -1,212
  -1,444
  -1,699
  -1,976
  -2,275
  -2,596
  -2,936
  -3,297
  -3,678
  -4,077
  -4,495
  -4,932
  -5,387
  -5,861
  -6,354
  -6,866
  -7,398
  -7,951
  -8,525
  -9,122
  -9,741
  -10,385
  -11,055
Issuance/(repayment) of debt, $m
  48
  97
  127
  161
  199
  241
  286
  334
  383
  434
  486
  537
  589
  639
  688
  736
  783
  829
  874
  919
  963
  1,006
  1,050
  1,093
  1,138
  1,184
  1,230
  1,278
  1,329
  1,381
  1,435
Issuance/(repurchase) of shares, $m
  0
  173
  240
  323
  424
  545
  687
  851
  1,037
  1,246
  1,477
  1,731
  2,007
  2,304
  2,622
  2,961
  3,320
  3,698
  4,096
  4,512
  4,948
  5,402
  5,875
  6,367
  6,879
  7,411
  7,964
  8,538
  9,135
  9,755
  10,400
Cash from financing (excl. dividends), $m  
  81
  270
  367
  484
  623
  786
  973
  1,185
  1,420
  1,680
  1,963
  2,268
  2,596
  2,943
  3,310
  3,697
  4,103
  4,527
  4,970
  5,431
  5,911
  6,408
  6,925
  7,460
  8,017
  8,595
  9,194
  9,816
  10,464
  11,136
  11,835
Total cash flow (excl. dividends), $m
  -27
  52
  69
  87
  108
  131
  155
  181
  208
  236
  264
  292
  320
  347
  374
  400
  426
  451
  475
  499
  523
  547
  570
  594
  618
  643
  669
  695
  722
  750
  780
Retained Cash Flow (-), $m
  11
  -173
  -240
  -323
  -424
  -545
  -687
  -851
  -1,037
  -1,246
  -1,477
  -1,731
  -2,007
  -2,304
  -2,622
  -2,961
  -3,320
  -3,698
  -4,096
  -4,512
  -4,948
  -5,402
  -5,875
  -6,367
  -6,879
  -7,411
  -7,964
  -8,538
  -9,135
  -9,755
  -10,400
Prev. year cash balance distribution, $m
 
  10
  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
 
  -110
  -171
  -236
  -316
  -414
  -532
  -670
  -829
  -1,010
  -1,213
  -1,439
  -1,687
  -1,957
  -2,248
  -2,561
  -2,894
  -3,247
  -3,621
  -4,013
  -4,424
  -4,855
  -5,304
  -5,773
  -6,260
  -6,768
  -7,295
  -7,843
  -8,413
  -9,005
  -9,620
Discount rate, %
 
  6.60
  6.93
  7.28
  7.64
  8.02
  8.42
  8.84
  9.29
  9.75
  10.24
  10.75
  11.29
  11.85
  12.45
  13.07
  13.72
  14.41
  15.13
  15.88
  16.68
  17.51
  18.39
  19.31
  20.27
  21.29
  22.35
  23.47
  24.64
  25.87
  27.17
PV of cash for distribution, $m
 
  -104
  -149
  -191
  -236
  -282
  -327
  -370
  -407
  -437
  -458
  -468
  -467
  -456
  -435
  -406
  -370
  -329
  -287
  -244
  -202
  -164
  -129
  -100
  -75
  -54
  -38
  -26
  -18
  -11
  -7
Current shareholders' claim on cash, %
  100
  29.4
  8.8
  2.7
  0.8
  0.3
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Sky Solar Holdings, Ltd., an independent power producer, develops, owns, and operates solar parks worldwide. It develops projects; and generates and sells electricity in the downstream solar market. The company also sells solar energy systems, including pipeline and related engineering, construction, and procurement services, as well as is involved in building and transferring solar parks. In addition, it provides operating and maintenance services for solar parks; and sells solar modules. As of December 31, 2015, the company developed 273 solar parks with an aggregate capacity of 252.8 megawatts in Greece, Japan, Bulgaria, the Czech Republic, Spain, Canada, the United States, Germany and Uruguay; and owned and operated 128.6 MW of solar parks. It also had 28.2 megawatts of solar parks under construction, 238.2 megawatts of shovel-ready projects, and 1.0 gigawatt of solar parks in pipeline. Sky Solar Holdings, Ltd. was founded in 2009 and is headquartered in Central, Hong Kong. Sky Solar Holdings, Ltd. is a subsidiary of Sky Power Group Ltd.

FINANCIAL RATIOS  of  Sky Solar Holdings ADR (SKYS)

Valuation Ratios
P/E Ratio -526.5
Price to Sales 11.2
Price to Book 4.7
Price to Tangible Book
Price to Cash Flow 131.6
Price to Free Cash Flow -5.4
Growth Rates
Sales Growth Rate 42.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 48.5%
Cap. Spend. - 3 Yr. Gr. Rate 36.9%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 74.3%
Total Debt to Equity 89.4%
Interest Coverage 1
Management Effectiveness
Return On Assets 0.9%
Ret/ On Assets - 3 Yr. Avg. -14.7%
Return On Total Capital -0.5%
Ret/ On T. Cap. - 3 Yr. Avg. -31.1%
Return On Equity -0.8%
Return On Equity - 3 Yr. Avg. -54.1%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 61.7%
Gross Margin - 3 Yr. Avg. 39.2%
EBITDA Margin 25.5%
EBITDA Margin - 3 Yr. Avg. -94.9%
Operating Margin 4.3%
Oper. Margin - 3 Yr. Avg. -101.9%
Pre-Tax Margin -4.3%
Pre-Tax Margin - 3 Yr. Avg. -122.4%
Net Profit Margin -2.1%
Net Profit Margin - 3 Yr. Avg. -125.5%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -2.4%
Payout Ratio 0%

SKYS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SKYS stock intrinsic value calculation we used $47 million for the last fiscal year's total revenue generated by Sky Solar Holdings ADR. The default revenue input number comes from 2015 income statement of Sky Solar Holdings 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 SKYS stock valuation model: a) initial revenue growth rate of 42.4% 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 6.6%, whose default value for SKYS is calculated based on our internal credit rating of Sky Solar Holdings 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 Sky Solar Holdings 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 SKYS stock the variable cost ratio is equal to 287.2%.

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 SKYS 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 5.3% for Sky Solar Holdings ADR.

Corporate tax rate of 27% is the nominal tax rate for Sky Solar Holdings 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 SKYS 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 SKYS are equal to 470.2%.

Life of production assets of 22.1 years is the average useful life of capital assets used in Sky Solar Holdings 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 SKYS is equal to -6.4%. 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 - $113 million for Sky Solar Holdings 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 48.751 million for Sky Solar Holdings 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 Sky Solar Holdings ADR at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

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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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