Intrinsic value of Bitauto Holdings Limited - BITA

Previous Close

$11.59

  Intrinsic Value

$35.48

stock screener

  Rating & Target

str. buy

+206%

Previous close

$11.59

 
Intrinsic value

$35.48

 
Up/down potential

+206%

 
Rating

str. buy

We calculate the intrinsic value of BITA 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 0.8

 

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, %
  59.10
  53.69
  48.82
  44.44
  40.50
  36.95
  33.75
  30.88
  28.29
  25.96
  23.86
  21.98
  20.28
  18.75
  17.38
  16.14
  15.02
  14.02
  13.12
  12.31
  11.58
  10.92
  10.33
  9.79
  9.32
  8.88
  8.50
  8.15
  7.83
  7.55
Revenue, $m
  2,105
  3,235
  4,814
  6,954
  9,770
  13,379
  17,895
  23,420
  30,045
  37,845
  46,876
  57,178
  68,773
  81,669
  95,861
  111,331
  128,059
  146,015
  165,173
  185,502
  206,979
  229,580
  253,290
  278,099
  304,005
  331,012
  359,133
  388,388
  418,804
  450,416
Variable operating expenses, $m
  2,125
  3,247
  4,815
  6,940
  9,736
  13,321
  17,805
  23,292
  29,871
  37,617
  46,551
  56,782
  68,297
  81,104
  95,197
  110,560
  127,172
  145,004
  164,029
  184,218
  205,545
  227,990
  251,535
  276,173
  301,900
  328,720
  356,646
  385,698
  415,903
  447,296
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
  2,125
  3,247
  4,815
  6,940
  9,736
  13,321
  17,805
  23,292
  29,871
  37,617
  46,551
  56,782
  68,297
  81,104
  95,197
  110,560
  127,172
  145,004
  164,029
  184,218
  205,545
  227,990
  251,535
  276,173
  301,900
  328,720
  356,646
  385,698
  415,903
  447,296
Operating income, $m
  -20
  -12
  -1
  14
  33
  58
  90
  128
  174
  228
  325
  396
  476
  566
  664
  771
  887
  1,011
  1,144
  1,285
  1,434
  1,590
  1,754
  1,926
  2,106
  2,293
  2,487
  2,690
  2,901
  3,120
EBITDA, $m
  109
  168
  250
  361
  507
  695
  929
  1,216
  1,560
  1,965
  2,434
  2,969
  3,571
  4,241
  4,978
  5,781
  6,650
  7,582
  8,577
  9,632
  10,748
  11,921
  13,152
  14,441
  15,786
  17,188
  18,648
  20,167
  21,747
  23,388
Interest expense (income), $m
  19
  211
  340
  525
  784
  1,135
  1,597
  2,189
  2,929
  3,835
  4,922
  6,201
  7,682
  9,372
  11,274
  13,389
  15,716
  18,254
  20,997
  23,942
  27,084
  30,419
  33,941
  37,648
  41,536
  45,605
  49,854
  54,284
  58,896
  63,694
  68,683
Earnings before tax, $m
  -230
  -351
  -526
  -770
  -1,101
  -1,538
  -2,099
  -2,801
  -3,662
  -4,694
  -5,877
  -7,286
  -8,896
  -10,708
  -12,725
  -14,945
  -17,367
  -19,986
  -22,798
  -25,800
  -28,985
  -32,351
  -35,894
  -39,610
  -43,500
  -47,562
  -51,796
  -56,206
  -60,793
  -65,563
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
Net income, $m
  -230
  -351
  -526
  -770
  -1,101
  -1,538
  -2,099
  -2,801
  -3,662
  -4,694
  -5,877
  -7,286
  -8,896
  -10,708
  -12,725
  -14,945
  -17,367
  -19,986
  -22,798
  -25,800
  -28,985
  -32,351
  -35,894
  -39,610
  -43,500
  -47,562
  -51,796
  -56,206
  -60,793
  -65,563

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
  11,196
  17,208
  25,608
  36,988
  51,967
  71,166
  95,186
  124,575
  159,815
  201,302
  249,340
  304,138
  365,816
  434,412
  509,896
  592,187
  681,162
  776,677
  878,578
  986,715
  1,100,949
  1,221,168
  1,347,286
  1,479,251
  1,617,048
  1,760,704
  1,910,284
  2,065,893
  2,227,680
  2,395,829
Adjusted assets (=assets-cash), $m
  11,196
  17,208
  25,608
  36,988
  51,967
  71,166
  95,186
  124,575
  159,815
  201,302
  249,340
  304,138
  365,816
  434,412
  509,896
  592,187
  681,162
  776,677
  878,578
  986,715
  1,100,949
  1,221,168
  1,347,286
  1,479,251
  1,617,048
  1,760,704
  1,910,284
  2,065,893
  2,227,680
  2,395,829
Revenue / Adjusted assets
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
  0.188
Average production assets, $m
  474
  728
  1,083
  1,565
  2,198
  3,010
  4,026
  5,270
  6,760
  8,515
  10,547
  12,865
  15,474
  18,376
  21,569
  25,050
  28,813
  32,853
  37,164
  41,738
  46,570
  51,655
  56,990
  62,572
  68,401
  74,478
  80,805
  87,387
  94,231
  101,344
Working capital, $m
  1,052
  1,618
  2,407
  3,477
  4,885
  6,690
  8,947
  11,710
  15,023
  18,922
  23,438
  28,589
  34,387
  40,835
  47,930
  55,666
  64,029
  73,008
  82,586
  92,751
  103,489
  114,790
  126,645
  139,050
  152,003
  165,506
  179,567
  194,194
  209,402
  225,208
Total debt, $m
  6,287
  9,720
  14,516
  21,015
  29,567
  40,530
  54,245
  71,027
  91,149
  114,838
  142,267
  173,557
  208,775
  247,943
  291,045
  338,033
  388,838
  443,377
  501,562
  563,308
  628,536
  697,181
  769,194
  844,546
  923,229
  1,005,256
  1,090,666
  1,179,519
  1,271,899
  1,367,913
Total liabilities, $m
  6,393
  9,825
  14,622
  21,120
  29,673
  40,636
  54,351
  71,132
  91,255
  114,944
  142,373
  173,663
  208,881
  248,049
  291,151
  338,139
  388,944
  443,483
  501,668
  563,414
  628,642
  697,287
  769,300
  844,652
  923,334
  1,005,362
  1,090,772
  1,179,625
  1,272,005
  1,368,018
Total equity, $m
  4,803
  7,382
  10,986
  15,868
  22,294
  30,530
  40,835
  53,443
  68,561
  86,359
  106,967
  130,475
  156,935
  186,363
  218,746
  254,048
  292,219
  333,195
  376,910
  423,301
  472,307
  523,881
  577,986
  634,598
  693,714
  755,342
  819,512
  886,268
  955,675
  1,027,811
Total liabilities and equity, $m
  11,196
  17,207
  25,608
  36,988
  51,967
  71,166
  95,186
  124,575
  159,816
  201,303
  249,340
  304,138
  365,816
  434,412
  509,897
  592,187
  681,163
  776,678
  878,578
  986,715
  1,100,949
  1,221,168
  1,347,286
  1,479,250
  1,617,048
  1,760,704
  1,910,284
  2,065,893
  2,227,680
  2,395,829
Debt-to-equity ratio
  1.310
  1.320
  1.320
  1.320
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
  1.330
Adjusted equity ratio
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429
  0.429

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -230
  -351
  -526
  -770
  -1,101
  -1,538
  -2,099
  -2,801
  -3,662
  -4,694
  -5,877
  -7,286
  -8,896
  -10,708
  -12,725
  -14,945
  -17,367
  -19,986
  -22,798
  -25,800
  -28,985
  -32,351
  -35,894
  -39,610
  -43,500
  -47,562
  -51,796
  -56,206
  -60,793
  -65,563
Depreciation, amort., depletion, $m
  129
  180
  251
  347
  474
  636
  840
  1,088
  1,386
  1,737
  2,109
  2,573
  3,095
  3,675
  4,314
  5,010
  5,763
  6,571
  7,433
  8,348
  9,314
  10,331
  11,398
  12,514
  13,680
  14,896
  16,161
  17,477
  18,846
  20,269
Funds from operations, $m
  -101
  -172
  -275
  -423
  -627
  -902
  -1,259
  -1,713
  -2,275
  -2,957
  -3,767
  -4,713
  -5,801
  -7,033
  -8,411
  -9,935
  -11,604
  -13,415
  -15,366
  -17,452
  -19,671
  -22,020
  -24,495
  -27,096
  -29,820
  -32,666
  -35,635
  -38,729
  -41,947
  -45,294
Change in working capital, $m
  391
  565
  790
  1,070
  1,408
  1,805
  2,258
  2,763
  3,313
  3,900
  4,516
  5,151
  5,798
  6,448
  7,096
  7,735
  8,364
  8,978
  9,579
  10,165
  10,738
  11,301
  11,855
  12,405
  12,953
  13,504
  14,060
  14,627
  15,208
  15,806
Cash from operations, $m
  -492
  -737
  -1,065
  -1,493
  -2,035
  -2,707
  -3,517
  -4,476
  -5,588
  -6,857
  -8,283
  -9,864
  -11,599
  -13,481
  -15,507
  -17,671
  -19,968
  -22,394
  -24,944
  -27,617
  -30,409
  -33,320
  -36,351
  -39,501
  -42,773
  -46,170
  -49,696
  -53,356
  -57,155
  -61,100
Maintenance CAPEX, $m
  -60
  -95
  -146
  -217
  -313
  -440
  -602
  -805
  -1,054
  -1,352
  -1,703
  -2,109
  -2,573
  -3,095
  -3,675
  -4,314
  -5,010
  -5,763
  -6,571
  -7,433
  -8,348
  -9,314
  -10,331
  -11,398
  -12,514
  -13,680
  -14,896
  -16,161
  -17,477
  -18,846
New CAPEX, $m
  -176
  -254
  -355
  -481
  -634
  -812
  -1,016
  -1,243
  -1,491
  -1,755
  -2,032
  -2,318
  -2,609
  -2,902
  -3,193
  -3,481
  -3,764
  -4,040
  -4,310
  -4,574
  -4,832
  -5,085
  -5,335
  -5,582
  -5,829
  -6,077
  -6,327
  -6,582
  -6,844
  -7,113
Cash from investing activities, $m
  -236
  -349
  -501
  -698
  -947
  -1,252
  -1,618
  -2,048
  -2,545
  -3,107
  -3,735
  -4,427
  -5,182
  -5,997
  -6,868
  -7,795
  -8,774
  -9,803
  -10,881
  -12,007
  -13,180
  -14,399
  -15,666
  -16,980
  -18,343
  -19,757
  -21,223
  -22,743
  -24,321
  -25,959
Free cash flow, $m
  -727
  -1,086
  -1,565
  -2,191
  -2,982
  -3,958
  -5,135
  -6,524
  -8,132
  -9,964
  -12,018
  -14,292
  -16,781
  -19,478
  -22,375
  -25,465
  -28,741
  -32,197
  -35,825
  -39,624
  -43,589
  -47,720
  -52,016
  -56,481
  -61,116
  -65,927
  -70,919
  -76,099
  -81,476
  -87,059
Issuance/(repayment) of debt, $m
  2,387
  3,432
  4,797
  6,498
  8,553
  10,963
  13,715
  16,781
  20,122
  23,689
  27,430
  31,290
  35,218
  39,168
  43,102
  46,988
  50,805
  54,539
  58,185
  61,746
  65,228
  68,645
  72,013
  75,352
  78,682
  82,027
  85,410
  88,853
  92,380
  96,013
Issuance/(repurchase) of shares, $m
  2,020
  2,930
  4,130
  5,652
  7,527
  9,775
  12,403
  15,409
  18,780
  22,492
  26,485
  30,795
  35,355
  40,136
  45,108
  50,248
  55,537
  60,962
  66,514
  72,190
  77,992
  83,925
  89,998
  96,223
  102,615
  109,190
  115,966
  122,963
  130,200
  137,699
Cash from financing (excl. dividends), $m  
  4,407
  6,362
  8,927
  12,150
  16,080
  20,738
  26,118
  32,190
  38,902
  46,181
  53,915
  62,085
  70,573
  79,304
  88,210
  97,236
  106,342
  115,501
  124,699
  133,936
  143,220
  152,570
  162,011
  171,575
  181,297
  191,217
  201,376
  211,816
  222,580
  233,712
Total cash flow (excl. dividends), $m
  3,680
  5,277
  7,361
  9,960
  13,098
  16,779
  20,983
  25,667
  30,769
  36,218
  41,897
  47,793
  53,793
  59,827
  65,835
  71,771
  77,601
  83,304
  88,874
  94,312
  99,631
  104,850
  109,995
  115,094
  120,182
  125,291
  130,457
  135,717
  141,104
  146,653
Retained Cash Flow (-), $m
  -2,020
  -2,930
  -4,130
  -5,652
  -7,527
  -9,775
  -12,403
  -15,409
  -18,780
  -22,492
  -26,485
  -30,795
  -35,355
  -40,136
  -45,108
  -50,248
  -55,537
  -60,962
  -66,514
  -72,190
  -77,992
  -83,925
  -89,998
  -96,223
  -102,615
  -109,190
  -115,966
  -122,963
  -130,200
  -137,699
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
  1,660
  2,347
  3,231
  4,307
  5,571
  7,004
  8,580
  10,257
  11,990
  13,726
  15,412
  16,998
  18,437
  19,691
  20,727
  21,523
  22,063
  22,342
  22,360
  22,122
  21,639
  20,925
  19,997
  18,871
  17,566
  16,101
  14,491
  12,754
  10,904
  8,954
Discount rate, %
  7.50
  7.88
  8.27
  8.68
  9.12
  9.57
  10.05
  10.55
  11.08
  11.63
  12.22
  12.83
  13.47
  14.14
  14.85
  15.59
  16.37
  17.19
  18.05
  18.95
  19.90
  20.89
  21.94
  23.04
  24.19
  25.40
  26.67
  28.00
  29.40
  30.87
PV of cash for distribution, $m
  1,544
  2,017
  2,546
  3,087
  3,601
  4,047
  4,389
  4,597
  4,656
  4,566
  4,337
  3,994
  3,567
  3,090
  2,598
  2,119
  1,676
  1,286
  956
  688
  479
  322
  209
  130
  78
  45
  24
  13
  6
  3
Current shareholders' claim on cash, %
  51.1
  27.3
  15.2
  8.7
  5.2
  3.2
  2.0
  1.3
  0.9
  0.6
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  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

Bitauto Holdings Limited is a provider of Internet content and marketing services for China's automotive industry. The Company's bitauto.com and taoche.com Websites provide consumers with information on new and used automobile pricing, and promotional information, specifications, reviews and consumer feedback. The Company operates through three segments: advertising business, EP platform business and digital marketing solutions business. The advertising business offers a range of advertising services mainly to automakers through its Websites, as well as mobile applications. The EP platform business provides Web-based and mobile-based integrated digital marketing solutions to automobile customers in China. The digital marketing solutions business provides automakers with digital marketing solutions, including Website creation and maintenance, online public relations, online marketing campaigns and advertising agent services.

FINANCIAL RATIOS  of  Bitauto Holdings Limited (BITA)

Valuation Ratios
P/E Ratio -10.3
Price to Sales 1
Price to Book 0.6
Price to Tangible Book
Price to Cash Flow 10.6
Price to Free Cash Flow -67.1
Growth Rates
Sales Growth Rate 35.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 158.8%
Cap. Spend. - 3 Yr. Gr. Rate 77.5%
Financial Strength
Quick Ratio 0
Current Ratio 0.5
LT Debt to Equity 42.7%
Total Debt to Equity 132.1%
Interest Coverage 0
Management Effectiveness
Return On Assets -1.4%
Ret/ On Assets - 3 Yr. Avg. 3.9%
Return On Total Capital -3.5%
Ret/ On T. Cap. - 3 Yr. Avg. 4.8%
Return On Equity -6%
Return On Equity - 3 Yr. Avg. 3.9%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 64.1%
Gross Margin - 3 Yr. Avg. 68.2%
EBITDA Margin 10.9%
EBITDA Margin - 3 Yr. Avg. 15%
Operating Margin -1.9%
Oper. Margin - 3 Yr. Avg. 2.5%
Pre-Tax Margin -3.4%
Pre-Tax Margin - 3 Yr. Avg. 3.9%
Net Profit Margin -9.3%
Net Profit Margin - 3 Yr. Avg. -0.9%
Effective Tax Rate -75%
Eff/ Tax Rate - 3 Yr. Avg. -26.8%
Payout Ratio 0%

BITA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BITA stock intrinsic value calculation we used $1323 million for the last fiscal year's total revenue generated by Bitauto Holdings Limited. The default revenue input number comes from 0001 income statement of Bitauto Holdings Limited. 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 BITA stock valuation model: a) initial revenue growth rate of 59.1% 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 7.5%, whose default value for BITA is calculated based on our internal credit rating of Bitauto Holdings Limited, 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 Bitauto Holdings Limited.
    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 BITA stock the variable cost ratio is equal to 101.9%.

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 BITA 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 Bitauto Holdings Limited.

Corporate tax rate of 27% is the nominal tax rate for Bitauto Holdings Limited. 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 BITA 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 BITA are equal to 22.5%.

Life of production assets of 3.7 years is the average useful life of capital assets used in Bitauto Holdings Limited 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 BITA is equal to 50%. 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 - $3013.25846433 million for Bitauto Holdings Limited - 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 72.717 million for Bitauto Holdings Limited 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 Bitauto Holdings Limited at the current share price and the inputted number of shares is $0.8 billion.

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