Intrinsic value of CBAK Energy Technology - CBAK

Previous Close

$0.57

  Intrinsic Value

$0.02

stock screener

  Rating & Target

str. sell

-96%

Previous close

$0.57

 
Intrinsic value

$0.02

 
Up/down potential

-96%

 
Rating

str. sell

We calculate the intrinsic value of CBAK 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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  60
  61
  62
  64
  66
  68
  71
  73
  76
  79
  82
  85
  89
  93
  97
  101
  105
  110
  115
  120
  126
  132
  138
  144
  151
  159
  166
  174
  183
  191
Variable operating expenses, $m
  71
  72
  74
  76
  79
  81
  84
  87
  90
  94
  97
  101
  106
  110
  115
  120
  125
  131
  137
  143
  150
  157
  164
  172
  180
  189
  198
  207
  217
  228
Fixed operating expenses, $m
  10
  10
  11
  11
  11
  11
  12
  12
  12
  12
  13
  13
  13
  14
  14
  14
  14
  15
  15
  15
  16
  16
  16
  17
  17
  18
  18
  18
  19
  19
Total operating expenses, $m
  81
  82
  85
  87
  90
  92
  96
  99
  102
  106
  110
  114
  119
  124
  129
  134
  139
  146
  152
  158
  166
  173
  180
  189
  197
  207
  216
  225
  236
  247
Operating income, $m
  -22
  -22
  -23
  -23
  -24
  -24
  -25
  -26
  -27
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -34
  -36
  -37
  -38
  -40
  -41
  -43
  -44
  -46
  -48
  -50
  -51
  -53
  -56
EBITDA, $m
  -20
  -20
  -21
  -21
  -22
  -22
  -23
  -23
  -24
  -25
  -26
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -34
  -36
  -37
  -38
  -40
  -41
  -43
  -44
  -46
  -48
  -49
Interest expense (income), $m
  0
  2
  1
  2
  2
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  11
  11
  12
  13
  14
  15
  16
  17
Earnings before tax, $m
  -23
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -66
  -70
  -73
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
  -23
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -66
  -70
  -73

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
  157
  161
  165
  169
  175
  180
  186
  193
  200
  208
  216
  225
  234
  244
  255
  266
  278
  290
  303
  317
  332
  347
  364
  381
  399
  418
  438
  460
  482
  505
Adjusted assets (=assets-cash), $m
  157
  161
  165
  169
  175
  180
  186
  193
  200
  208
  216
  225
  234
  244
  255
  266
  278
  290
  303
  317
  332
  347
  364
  381
  399
  418
  438
  460
  482
  505
Revenue / Adjusted assets
  0.382
  0.379
  0.376
  0.379
  0.377
  0.378
  0.382
  0.378
  0.380
  0.380
  0.380
  0.378
  0.380
  0.381
  0.380
  0.380
  0.378
  0.379
  0.380
  0.379
  0.380
  0.380
  0.379
  0.378
  0.378
  0.380
  0.379
  0.378
  0.380
  0.378
Average production assets, $m
  58
  59
  61
  63
  65
  67
  69
  71
  74
  77
  80
  83
  87
  90
  94
  98
  103
  107
  112
  117
  123
  128
  134
  141
  148
  155
  162
  170
  178
  187
Working capital, $m
  -29
  -29
  -30
  -31
  -32
  -33
  -34
  -35
  -36
  -38
  -39
  -41
  -43
  -44
  -46
  -48
  -50
  -53
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -76
  -80
  -83
  -87
  -92
Total debt, $m
  25
  28
  32
  36
  40
  45
  51
  57
  63
  70
  78
  86
  94
  103
  112
  122
  133
  144
  156
  169
  182
  196
  211
  226
  242
  260
  278
  297
  317
  338
Total liabilities, $m
  141
  145
  148
  153
  157
  162
  168
  174
  180
  187
  194
  202
  211
  220
  229
  239
  250
  261
  273
  286
  299
  313
  327
  343
  359
  376
  395
  414
  434
  455
Total equity, $m
  16
  16
  16
  17
  17
  18
  19
  19
  20
  21
  22
  22
  23
  24
  25
  27
  28
  29
  30
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  51
Total liabilities and equity, $m
  157
  161
  164
  170
  174
  180
  187
  193
  200
  208
  216
  224
  234
  244
  254
  266
  278
  290
  303
  318
  332
  348
  363
  381
  399
  418
  439
  460
  482
  506
Debt-to-equity ratio
  1.560
  1.730
  1.910
  2.110
  2.310
  2.520
  2.730
  2.950
  3.170
  3.380
  3.590
  3.810
  4.010
  4.220
  4.410
  4.610
  4.790
  4.970
  5.150
  5.320
  5.480
  5.640
  5.790
  5.930
  6.070
  6.210
  6.340
  6.460
  6.580
  6.690
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -23
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -66
  -70
  -73
Depreciation, amort., depletion, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
Funds from operations, $m
  -21
  -21
  -22
  -23
  -24
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -66
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
Cash from operations, $m
  -21
  -21
  -21
  -22
  -23
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -55
  -57
  -60
  -62
Maintenance CAPEX, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
New CAPEX, $m
  -2
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
Cash from investing activities, $m
  -4
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -12
  -12
  -12
  -13
  -14
  -15
Free cash flow, $m
  -24
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -34
  -35
  -36
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -77
Issuance/(repayment) of debt, $m
  -10
  3
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
  15
  16
  16
  17
  18
  19
  20
  21
Issuance/(repurchase) of shares, $m
  37
  24
  24
  25
  26
  27
  28
  29
  30
  32
  33
  34
  36
  37
  39
  40
  42
  44
  46
  48
  50
  53
  55
  57
  60
  63
  66
  69
  72
  75
Cash from financing (excl. dividends), $m  
  27
  27
  28
  29
  31
  32
  34
  35
  36
  39
  40
  42
  44
  46
  48
  50
  53
  55
  58
  61
  63
  67
  70
  73
  76
  80
  84
  88
  92
  96
Total cash flow (excl. dividends), $m
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  17
  18
  19
Retained Cash Flow (-), $m
  -37
  -24
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -44
  -46
  -48
  -50
  -53
  -55
  -57
  -60
  -63
  -66
  -69
  -72
  -75
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
  -34
  -21
  -21
  -21
  -22
  -22
  -23
  -24
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -33
  -34
  -35
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
Discount rate, %
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
  34.58
PV of cash for distribution, $m
  -31
  -18
  -16
  -15
  -13
  -12
  -11
  -10
  -9
  -7
  -6
  -5
  -5
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  29.2
  23.9
  19.6
  16.1
  13.1
  10.7
  8.8
  7.1
  5.8
  4.7
  3.9
  3.1
  2.5
  2.1
  1.7
  1.4
  1.1
  0.9
  0.7
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1

CBAK Energy Technology, Inc., formerly China BAK Battery, Inc., is a holding company. The Company and its subsidiaries are engaged in the manufacture, commercialization and distribution of a range of standard and customized lithium ion (Li-ion) rechargeable batteries for use in an array of applications. As of September 30, 2016, it manufactured five types of Li-ion rechargeable batteries: aluminum-case cell, battery pack, cylindrical cell, lithium polymer cell and high-power lithium battery cell. The Company's products are sold to packing plants operated by third parties primarily for use in mobile phones and other electronic devices. Its products are used in various applications, including electric vehicles (EV), such as electric cars, electric buses, hybrid electric cars and buses; light electric vehicles (LEV), such as electric bicycles, electric motors and sight-seeing cars, and electric tools, energy storage, uninterruptible power supply (UPS), and other high power applications.

FINANCIAL RATIOS  of  CBAK Energy Technology (CBAK)

Valuation Ratios
P/E Ratio -5.6
Price to Sales 2.8
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow -11.1
Price to Free Cash Flow -1.9
Growth Rates
Sales Growth Rate -60%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.7%
Cap. Spend. - 3 Yr. Gr. Rate -23.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 126.7%
Total Debt to Equity 166.7%
Interest Coverage 0
Management Effectiveness
Return On Assets -2.2%
Ret/ On Assets - 3 Yr. Avg. 3.7%
Return On Total Capital -5%
Ret/ On T. Cap. - 3 Yr. Avg. 12.8%
Return On Equity -13.3%
Return On Equity - 3 Yr. Avg. 31.4%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. -4.3%
EBITDA Margin -50%
EBITDA Margin - 3 Yr. Avg. -5.7%
Operating Margin -50%
Oper. Margin - 3 Yr. Avg. -66.2%
Pre-Tax Margin -50%
Pre-Tax Margin - 3 Yr. Avg. -11.4%
Net Profit Margin -50%
Net Profit Margin - 3 Yr. Avg. -21.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 6%
Payout Ratio 0%

CBAK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CBAK stock intrinsic value calculation we used $58.375399 million for the last fiscal year's total revenue generated by CBAK Energy Technology. The default revenue input number comes from 0001 income statement of CBAK Energy Technology. 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 CBAK stock valuation model: a) initial revenue growth rate of 2% 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 8.4%, whose default value for CBAK is calculated based on our internal credit rating of CBAK Energy Technology, 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 CBAK Energy Technology.
    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 CBAK stock the variable cost ratio is equal to 119%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $10 million in the base year in the intrinsic value calculation for CBAK 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 CBAK Energy Technology.

Corporate tax rate of 27% is the nominal tax rate for CBAK Energy Technology. 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 CBAK 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 CBAK are equal to 97.5%.

Life of production assets of 35.5 years is the average useful life of capital assets used in CBAK Energy Technology 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 CBAK is equal to -47.9%. 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 - $2.195726 million for CBAK Energy Technology - 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 26.647 million for CBAK Energy Technology 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 CBAK Energy Technology at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ China BAK Signs Purchase Contract with Sysgration   [Mar-16-16 08:00AM  PR Newswire]
▶ 10-Q for China BAK Battery, Inc.   [Aug-21  08:10PM  at Company Spotlight]
▶ 10-Q for China BAK Battery, Inc.   [May-22  08:10PM  at Company Spotlight]
▶ 10-Q for China BAK Battery, Inc.   [Feb-19  07:07PM  at Company Spotlight]
▶ 10-K for China BAK Battery, Inc.   [Jan-15  07:07PM  Company Spotlight]
▶ Watch For A Sharp Drop In China Bak Battery   [Jul-23  10:00AM  at Seeking Alpha]
▶ China BAK Battery discloses Wang sale of subsidiary pledged equity   [Jul-07  09:28AM  theflyonthewall.com]
▶ CHINA BAK BATTERY INC Files SEC form 8-K, Other Events   [Jul-03  05:17PM  EDGAR Online]
▶ China BAK Battery files to delay 10-Q   [May-15  01:11PM  at theflyonthewall.com]
▶ Why China Bak Battery (CBAK) Hit A One-Year High Today   [Mar-11  01:15PM  at TheStreet]
▶ Why China Bak Battery (CBAK) Hit a One-Year High Today   [Feb-28  12:17PM  at TheStreet]
▶ CHINA BAK BATTERY INC Files SEC form 10-K, Annual Report   [Jan-14  05:19PM  EDGAR Online]
▶ CHINA BAK BATTERY INC Files SEC form 8-K, Other Events   [Aug-13  04:09PM  EDGAR Online]
▶ CHINA BAK BATTERY INC Files SEC form 8-K, Other Events   [Jun-20  09:48AM  EDGAR Online]
▶ Beware the Chinese Rumor Mill   [Jun-07  11:21AM  TheStreet]
▶ CHINA BAK BATTERY INC Files SEC form 10-K, Annual Report   [Dec-31-12 04:38PM  EDGAR Online]

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