Intrinsic value of Asia Pacific Wire & Cable Corporation Li - APWC

Previous Close

$2.25

  Intrinsic Value

$36.87

stock screener

  Rating & Target

str. buy

+999%

Previous close

$2.25

 
Intrinsic value

$36.87

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of APWC 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 0001), $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 0.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.60
  10.04
  9.54
  9.08
  8.67
  8.31
  7.98
  7.68
  7.41
  7.17
  6.95
  6.76
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.76
  5.68
  5.61
  5.55
  5.50
  5.45
  5.40
  5.36
  5.33
  5.29
  5.26
Revenue, $m
  470
  517
  567
  618
  672
  727
  785
  846
  908
  974
  1,041
  1,112
  1,185
  1,261
  1,340
  1,423
  1,508
  1,598
  1,691
  1,789
  1,890
  1,996
  2,107
  2,223
  2,344
  2,471
  2,603
  2,742
  2,887
  3,039
Variable operating expenses, $m
  367
  403
  441
  481
  522
  565
  610
  656
  705
  755
  803
  857
  914
  972
  1,033
  1,097
  1,163
  1,232
  1,304
  1,379
  1,458
  1,539
  1,625
  1,714
  1,808
  1,905
  2,007
  2,114
  2,226
  2,343
Fixed operating expenses, $m
  80
  81
  83
  85
  87
  89
  91
  93
  95
  97
  99
  101
  104
  106
  108
  110
  113
  115
  118
  121
  123
  126
  129
  131
  134
  137
  140
  143
  147
  150
Total operating expenses, $m
  447
  484
  524
  566
  609
  654
  701
  749
  800
  852
  902
  958
  1,018
  1,078
  1,141
  1,207
  1,276
  1,347
  1,422
  1,500
  1,581
  1,665
  1,754
  1,845
  1,942
  2,042
  2,147
  2,257
  2,373
  2,493
Operating income, $m
  24
  33
  42
  52
  63
  73
  85
  97
  109
  122
  139
  153
  168
  183
  199
  215
  232
  250
  269
  289
  309
  331
  354
  377
  402
  428
  455
  484
  514
  546
EBITDA, $m
  33
  43
  53
  64
  75
  86
  98
  111
  124
  137
  152
  166
  182
  198
  214
  232
  250
  269
  289
  310
  332
  355
  379
  404
  430
  457
  486
  517
  548
  582
Interest expense (income), $m
  1
  2
  3
  4
  5
  7
  8
  9
  11
  12
  13
  15
  16
  18
  20
  22
  23
  25
  27
  29
  31
  34
  36
  38
  41
  44
  46
  49
  52
  56
  59
Earnings before tax, $m
  21
  29
  38
  47
  56
  65
  76
  86
  97
  108
  124
  137
  150
  163
  177
  192
  207
  223
  240
  257
  276
  295
  315
  336
  358
  382
  406
  432
  458
  487
Tax expense, $m
  6
  8
  10
  13
  15
  18
  20
  23
  26
  29
  34
  37
  40
  44
  48
  52
  56
  60
  65
  69
  74
  80
  85
  91
  97
  103
  110
  117
  124
  131
Net income, $m
  16
  21
  28
  34
  41
  48
  55
  63
  71
  79
  91
  100
  109
  119
  129
  140
  151
  163
  175
  188
  201
  215
  230
  245
  262
  279
  296
  315
  335
  355

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  370
  408
  446
  487
  529
  573
  619
  666
  716
  767
  821
  876
  934
  994
  1,056
  1,121
  1,189
  1,259
  1,333
  1,409
  1,490
  1,573
  1,660
  1,752
  1,847
  1,947
  2,051
  2,161
  2,275
  2,395
Adjusted assets (=assets-cash), $m
  370
  408
  446
  487
  529
  573
  619
  666
  716
  767
  821
  876
  934
  994
  1,056
  1,121
  1,189
  1,259
  1,333
  1,409
  1,490
  1,573
  1,660
  1,752
  1,847
  1,947
  2,051
  2,161
  2,275
  2,395
Revenue / Adjusted assets
  1.270
  1.267
  1.271
  1.269
  1.270
  1.269
  1.268
  1.270
  1.268
  1.270
  1.268
  1.269
  1.269
  1.269
  1.269
  1.269
  1.268
  1.269
  1.269
  1.270
  1.268
  1.269
  1.269
  1.269
  1.269
  1.269
  1.269
  1.269
  1.269
  1.269
Average production assets, $m
  46
  50
  55
  60
  65
  71
  76
  82
  88
  94
  101
  108
  115
  122
  130
  138
  146
  155
  164
  173
  183
  194
  204
  216
  227
  240
  253
  266
  280
  295
Working capital, $m
  196
  215
  236
  257
  279
  303
  327
  352
  378
  405
  433
  462
  493
  525
  557
  592
  627
  665
  704
  744
  786
  830
  877
  925
  975
  1,028
  1,083
  1,141
  1,201
  1,264
Total debt, $m
  61
  81
  102
  124
  147
  171
  195
  221
  248
  276
  305
  335
  366
  398
  432
  467
  504
  542
  582
  624
  667
  712
  760
  809
  861
  915
  972
  1,031
  1,093
  1,158
Total liabilities, $m
  201
  221
  242
  264
  287
  311
  335
  361
  388
  416
  445
  475
  506
  539
  572
  608
  644
  682
  722
  764
  807
  853
  900
  949
  1,001
  1,055
  1,112
  1,171
  1,233
  1,298
Total equity, $m
  170
  187
  204
  223
  242
  263
  283
  305
  328
  351
  376
  401
  428
  455
  484
  513
  544
  577
  610
  646
  682
  720
  760
  802
  846
  892
  940
  990
  1,042
  1,097
Total liabilities and equity, $m
  371
  408
  446
  487
  529
  574
  618
  666
  716
  767
  821
  876
  934
  994
  1,056
  1,121
  1,188
  1,259
  1,332
  1,410
  1,489
  1,573
  1,660
  1,751
  1,847
  1,947
  2,052
  2,161
  2,275
  2,395
Debt-to-equity ratio
  0.360
  0.430
  0.500
  0.560
  0.610
  0.650
  0.690
  0.720
  0.760
  0.780
  0.810
  0.830
  0.860
  0.880
  0.890
  0.910
  0.930
  0.940
  0.950
  0.970
  0.980
  0.990
  1.000
  1.010
  1.020
  1.030
  1.030
  1.040
  1.050
  1.060
Adjusted equity ratio
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  16
  21
  28
  34
  41
  48
  55
  63
  71
  79
  91
  100
  109
  119
  129
  140
  151
  163
  175
  188
  201
  215
  230
  245
  262
  279
  296
  315
  335
  355
Depreciation, amort., depletion, $m
  10
  10
  11
  12
  12
  13
  13
  14
  15
  16
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
  26
  28
  29
  31
  32
  34
  36
Funds from operations, $m
  25
  32
  39
  46
  53
  61
  69
  77
  86
  95
  103
  113
  123
  134
  145
  157
  169
  182
  195
  209
  224
  239
  255
  272
  289
  308
  327
  348
  369
  391
Change in working capital, $m
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  34
  36
  37
  39
  41
  42
  44
  46
  48
  50
  53
  55
  58
  60
  63
Cash from operations, $m
  7
  12
  18
  24
  31
  37
  44
  52
  60
  68
  75
  84
  93
  102
  112
  123
  133
  145
  156
  169
  181
  195
  209
  224
  239
  255
  272
  290
  308
  328
Maintenance CAPEX, $m
  -5
  -6
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
New CAPEX, $m
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
Cash from investing activities, $m
  -10
  -11
  -11
  -12
  -12
  -13
  -15
  -15
  -16
  -17
  -19
  -19
  -20
  -21
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -49
Free cash flow, $m
  -3
  2
  7
  12
  18
  24
  30
  37
  44
  51
  57
  65
  73
  81
  90
  99
  108
  118
  128
  139
  150
  162
  175
  187
  201
  215
  230
  246
  262
  279
Issuance/(repayment) of debt, $m
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  42
  43
  45
  47
  49
  52
  54
  57
  59
  62
  65
Issuance/(repurchase) of shares, $m
  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
Cash from financing (excl. dividends), $m  
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  42
  43
  45
  47
  49
  52
  54
  57
  59
  62
  65
Total cash flow (excl. dividends), $m
  17
  22
  28
  34
  41
  48
  55
  63
  70
  78
  86
  95
  104
  113
  123
  134
  145
  156
  168
  181
  194
  207
  222
  237
  253
  269
  287
  305
  324
  344
Retained Cash Flow (-), $m
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -32
  -34
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -55
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
  5
  10
  16
  22
  28
  34
  41
  48
  55
  61
  69
  77
  86
  95
  104
  114
  124
  135
  146
  157
  169
  182
  195
  209
  224
  239
  255
  272
  289
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
  5
  9
  13
  17
  20
  23
  25
  27
  29
  29
  30
  29
  29
  28
  26
  25
  23
  21
  18
  16
  14
  12
  10
  8
  7
  5
  4
  3
  2
Current shareholders' claim on cash, %
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4

Asia Pacific Wire & Cable Corporation Limited is a holding company that operates its business through operating subsidiaries and associates, which are principally located in Thailand, China, Singapore and Australia. The Company is engaged in the manufacture and distribution of telecommunications (primarily copper, but also fiber optic) and power cable, enameled wire and electronic wire products in the Asia Pacific region, primarily in Thailand, China, Singapore and Australia. Its segments include North Asia region, the Thailand region and the Rest of the World (ROW) region. It manufactures and distributes its own wire and cable products (Manufactured Products), and also distributes wire and cable products (Distributed Products) manufactured by its principal shareholder, Pacific Electric Wire & Cable Co., Ltd., and other third-party suppliers. The Company also provides project engineering services in the supply, delivery and installation of power cables to certain of its customers.

FINANCIAL RATIOS  of  Asia Pacific Wire & Cable Corporation Li (APWC)

Valuation Ratios
P/E Ratio 10.4
Price to Sales 0.1
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 3.5
Price to Free Cash Flow 7.8
Growth Rates
Sales Growth Rate -1.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -28.6%
Cap. Spend. - 3 Yr. Gr. Rate -12.9%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 22.1%
Interest Coverage 8
Management Effectiveness
Return On Assets 1.3%
Ret/ On Assets - 3 Yr. Avg. -0.1%
Return On Total Capital 1.8%
Ret/ On T. Cap. - 3 Yr. Avg. -0.7%
Return On Equity 2.2%
Return On Equity - 3 Yr. Avg. -0.9%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 8.3%
Gross Margin - 3 Yr. Avg. 7.5%
EBITDA Margin 3.4%
EBITDA Margin - 3 Yr. Avg. 1.8%
Operating Margin 2.1%
Oper. Margin - 3 Yr. Avg. 1%
Pre-Tax Margin 1.8%
Pre-Tax Margin - 3 Yr. Avg. 0.2%
Net Profit Margin 0.8%
Net Profit Margin - 3 Yr. Avg. -0.4%
Effective Tax Rate 14.3%
Eff/ Tax Rate - 3 Yr. Avg. 18.1%
Payout Ratio 0%

APWC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the APWC stock intrinsic value calculation we used $425 million for the last fiscal year's total revenue generated by Asia Pacific Wire & Cable Corporation Li. The default revenue input number comes from 0001 income statement of Asia Pacific Wire & Cable Corporation Li. 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 APWC stock valuation model: a) initial revenue growth rate of 10.6% 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 APWC is calculated based on our internal credit rating of Asia Pacific Wire & Cable Corporation Li, 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 Asia Pacific Wire & Cable Corporation Li.
    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 APWC stock the variable cost ratio is equal to 78.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $78 million in the base year in the intrinsic value calculation for APWC 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 5.4% for Asia Pacific Wire & Cable Corporation Li.

Corporate tax rate of 27% is the nominal tax rate for Asia Pacific Wire & Cable Corporation Li. 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 APWC 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 APWC are equal to 9.7%.

Life of production assets of 8.2 years is the average useful life of capital assets used in Asia Pacific Wire & Cable Corporation Li 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 APWC is equal to 41.6%. 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 - $153.328 million for Asia Pacific Wire & Cable Corporation Li - 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 13.821 million for Asia Pacific Wire & Cable Corporation Li 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 Asia Pacific Wire & Cable Corporation Li at the current share price and the inputted number of shares is $0.0 billion.

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