Intrinsic value of China Internet Nationwide Financial Serv - CIFS

Previous Close

$1.74

  Intrinsic Value

$241.67

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  Rating & Target

str. buy

+999%

Previous close

$1.74

 
Intrinsic value

$241.67

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CIFS 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, %
  58.70
  53.33
  48.50
  44.15
  40.23
  36.71
  33.54
  30.68
  28.12
  25.80
  23.72
  21.85
  20.17
  18.65
  17.28
  16.06
  14.95
  13.96
  13.06
  12.25
  11.53
  10.88
  10.29
  9.76
  9.28
  8.86
  8.47
  8.12
  7.81
  7.53
Revenue, $m
  40
  61
  91
  131
  183
  251
  335
  438
  561
  705
  873
  1,064
  1,278
  1,516
  1,778
  2,064
  2,373
  2,704
  3,057
  3,431
  3,827
  4,243
  4,680
  5,136
  5,613
  6,110
  6,628
  7,166
  7,726
  8,308
Variable operating expenses, $m
  6
  9
  14
  20
  28
  38
  51
  66
  85
  107
  132
  161
  193
  229
  269
  312
  359
  409
  463
  519
  579
  642
  708
  777
  849
  925
  1,003
  1,084
  1,169
  1,257
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
  6
  9
  14
  20
  28
  38
  51
  66
  85
  107
  132
  161
  193
  229
  269
  312
  359
  409
  463
  519
  579
  642
  708
  777
  849
  925
  1,003
  1,084
  1,169
  1,257
Operating income, $m
  34
  52
  77
  111
  155
  213
  284
  371
  476
  598
  741
  903
  1,085
  1,287
  1,509
  1,752
  2,014
  2,295
  2,594
  2,912
  3,248
  3,601
  3,972
  4,359
  4,764
  5,186
  5,625
  6,082
  6,557
  7,050
EBITDA, $m
  34
  52
  77
  111
  156
  213
  285
  372
  476
  599
  742
  904
  1,086
  1,288
  1,511
  1,754
  2,016
  2,297
  2,597
  2,915
  3,251
  3,605
  3,976
  4,364
  4,769
  5,191
  5,631
  6,088
  6,564
  7,058
Interest expense (income), $m
  0
  0
  0
  1
  1
  2
  3
  4
  5
  7
  9
  12
  15
  18
  21
  26
  30
  35
  40
  46
  52
  58
  65
  72
  80
  88
  96
  104
  113
  122
  132
Earnings before tax, $m
  34
  51
  76
  110
  154
  210
  280
  366
  469
  589
  729
  888
  1,067
  1,265
  1,484
  1,722
  1,979
  2,254
  2,548
  2,860
  3,189
  3,536
  3,899
  4,279
  4,676
  5,090
  5,521
  5,969
  6,434
  6,919
Tax expense, $m
  9
  14
  21
  30
  41
  57
  76
  99
  127
  159
  197
  240
  288
  342
  401
  465
  534
  609
  688
  772
  861
  955
  1,053
  1,155
  1,263
  1,374
  1,491
  1,612
  1,737
  1,868
Net income, $m
  25
  38
  56
  80
  112
  153
  205
  267
  342
  430
  532
  648
  779
  924
  1,083
  1,257
  1,444
  1,646
  1,860
  2,088
  2,328
  2,581
  2,846
  3,124
  3,414
  3,716
  4,030
  4,357
  4,697
  5,051

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
  29
  44
  66
  95
  133
  181
  242
  316
  405
  510
  631
  768
  923
  1,096
  1,285
  1,491
  1,714
  1,954
  2,209
  2,479
  2,765
  3,066
  3,381
  3,711
  4,056
  4,415
  4,789
  5,178
  5,582
  6,003
Adjusted assets (=assets-cash), $m
  29
  44
  66
  95
  133
  181
  242
  316
  405
  510
  631
  768
  923
  1,096
  1,285
  1,491
  1,714
  1,954
  2,209
  2,479
  2,765
  3,066
  3,381
  3,711
  4,056
  4,415
  4,789
  5,178
  5,582
  6,003
Revenue / Adjusted assets
  1.379
  1.386
  1.379
  1.379
  1.376
  1.387
  1.384
  1.386
  1.385
  1.382
  1.384
  1.385
  1.385
  1.383
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
  1.384
Average production assets, $m
  1
  2
  2
  4
  5
  7
  9
  12
  15
  19
  24
  29
  35
  41
  48
  56
  64
  73
  83
  93
  103
  115
  126
  139
  152
  165
  179
  193
  209
  224
Working capital, $m
  -1
  -1
  -2
  -3
  -4
  -6
  -8
  -10
  -13
  -16
  -20
  -24
  -29
  -35
  -41
  -47
  -55
  -62
  -70
  -79
  -88
  -98
  -108
  -118
  -129
  -141
  -152
  -165
  -178
  -191
Total debt, $m
  5
  12
  21
  34
  50
  72
  98
  131
  170
  216
  269
  330
  398
  473
  556
  647
  745
  850
  962
  1,081
  1,206
  1,338
  1,477
  1,621
  1,773
  1,930
  2,095
  2,265
  2,443
  2,627
Total liabilities, $m
  13
  19
  29
  41
  58
  80
  106
  139
  178
  224
  277
  337
  405
  481
  564
  655
  753
  858
  970
  1,088
  1,214
  1,346
  1,484
  1,629
  1,780
  1,938
  2,102
  2,273
  2,451
  2,635
Total equity, $m
  16
  25
  37
  53
  74
  102
  136
  177
  227
  286
  354
  431
  518
  615
  721
  837
  962
  1,096
  1,239
  1,391
  1,551
  1,720
  1,897
  2,082
  2,275
  2,477
  2,687
  2,905
  3,132
  3,367
Total liabilities and equity, $m
  29
  44
  66
  94
  132
  182
  242
  316
  405
  510
  631
  768
  923
  1,096
  1,285
  1,492
  1,715
  1,954
  2,209
  2,479
  2,765
  3,066
  3,381
  3,711
  4,055
  4,415
  4,789
  5,178
  5,583
  6,002
Debt-to-equity ratio
  0.300
  0.470
  0.570
  0.640
  0.680
  0.710
  0.730
  0.740
  0.750
  0.760
  0.760
  0.760
  0.770
  0.770
  0.770
  0.770
  0.770
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
Adjusted equity ratio
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561
  0.561

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  25
  38
  56
  80
  112
  153
  205
  267
  342
  430
  532
  648
  779
  924
  1,083
  1,257
  1,444
  1,646
  1,860
  2,088
  2,328
  2,581
  2,846
  3,124
  3,414
  3,716
  4,030
  4,357
  4,697
  5,051
Depreciation, amort., depletion, $m
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
Funds from operations, $m
  25
  38
  56
  80
  113
  154
  205
  268
  343
  431
  533
  649
  780
  925
  1,085
  1,259
  1,447
  1,648
  1,863
  2,091
  2,332
  2,585
  2,851
  3,129
  3,419
  3,721
  4,036
  4,364
  4,704
  5,058
Change in working capital, $m
  0
  0
  -1
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
Cash from operations, $m
  25
  38
  57
  81
  114
  155
  207
  270
  346
  434
  537
  654
  785
  931
  1,091
  1,265
  1,454
  1,656
  1,871
  2,100
  2,341
  2,595
  2,861
  3,139
  3,430
  3,733
  4,048
  4,376
  4,717
  5,071
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
New CAPEX, $m
  0
  -1
  -1
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -5
  -5
  -6
  -6
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
Cash from investing activities, $m
  0
  -1
  -1
  -1
  -1
  -2
  -2
  -3
  -3
  -5
  -6
  -6
  -7
  -7
  -8
  -10
  -10
  -11
  -12
  -13
  -14
  -14
  -16
  -16
  -18
  -18
  -19
  -21
  -21
  -23
Free cash flow, $m
  25
  38
  56
  80
  112
  153
  204
  267
  342
  430
  532
  648
  778
  923
  1,082
  1,256
  1,443
  1,645
  1,859
  2,087
  2,327
  2,580
  2,845
  3,123
  3,412
  3,714
  4,028
  4,355
  4,695
  5,049
Issuance/(repayment) of debt, $m
  5
  7
  9
  13
  17
  21
  27
  33
  39
  46
  53
  60
  68
  76
  83
  91
  98
  105
  112
  119
  125
  132
  138
  145
  151
  158
  164
  171
  178
  185
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
Cash from financing (excl. dividends), $m  
  5
  7
  9
  13
  17
  21
  27
  33
  39
  46
  53
  60
  68
  76
  83
  91
  98
  105
  112
  119
  125
  132
  138
  145
  151
  158
  164
  171
  178
  185
Total cash flow (excl. dividends), $m
  29
  44
  65
  93
  129
  175
  231
  300
  381
  476
  585
  708
  846
  999
  1,165
  1,346
  1,541
  1,750
  1,971
  2,206
  2,453
  2,712
  2,984
  3,267
  3,563
  3,872
  4,193
  4,526
  4,873
  5,233
Retained Cash Flow (-), $m
  -6
  -9
  -12
  -16
  -21
  -27
  -34
  -42
  -50
  -59
  -68
  -77
  -87
  -97
  -106
  -116
  -125
  -134
  -143
  -152
  -160
  -169
  -177
  -185
  -193
  -201
  -210
  -218
  -227
  -236
Prev. year cash balance distribution, $m
  61
  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
  84
  36
  53
  77
  108
  147
  197
  258
  331
  417
  517
  631
  759
  902
  1,059
  1,231
  1,416
  1,615
  1,828
  2,054
  2,292
  2,543
  2,807
  3,082
  3,370
  3,670
  3,983
  4,308
  4,646
  4,997
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
  81
  33
  46
  63
  83
  107
  133
  161
  190
  219
  245
  269
  289
  303
  311
  313
  308
  298
  281
  261
  237
  211
  184
  157
  131
  107
  85
  67
  51
  38
Current shareholders' claim on cash, %
  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

China Internet Nationwide Financial Services Inc is a holding company. The Company is engaged in the business of providing financial advisory services small-to-medium sized enterprises (SMEs). The Company, through its subsidiaries offers commercial payment advisory services, international corporate financing advisory services and intermediary bank loan advisory services. Commercial payment advisory service provides commercial payment advisory services to its clients. International corporate financing advisory services help its clients obtain financing to support their overseas business development. The Company’s subsidiaries include Hongkong Internet Financial Services Limited (HKIFS), Beijing Yingxin Yijia Network Technology Co., Ltd (WFOE), Sheng Ying Xin (Beijing) Management Consulting Co., Ltd (Sheng Ying Xin or SYX), and Kashgar Sheng Yingxin Enterprise Consulting Co., Ltd. (Kashgar SYX).

FINANCIAL RATIOS  of  China Internet Nationwide Financial Serv (CIFS)

Valuation Ratios
P/E Ratio 0.3
Price to Sales 0.2
Price to Book 0.1
Price to Tangible Book
Price to Cash Flow 0.3
Price to Free Cash Flow 0.3
Growth Rates
Sales Growth Rate 100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 45.9%
Ret/ On Assets - 3 Yr. Avg. 28.2%
Return On Total Capital 52.8%
Ret/ On T. Cap. - 3 Yr. Avg. 31.9%
Return On Equity 52.8%
Return On Equity - 3 Yr. Avg. 31.9%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 93.8%
Gross Margin - 3 Yr. Avg. 64.6%
EBITDA Margin 100%
EBITDA Margin - 3 Yr. Avg. 62.5%
Operating Margin 87.5%
Oper. Margin - 3 Yr. Avg. 54.2%
Pre-Tax Margin 100%
Pre-Tax Margin - 3 Yr. Avg. 62.5%
Net Profit Margin 87.5%
Net Profit Margin - 3 Yr. Avg. 54.2%
Effective Tax Rate 12.5%
Eff/ Tax Rate - 3 Yr. Avg. 8.9%
Payout Ratio 0%

CIFS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CIFS stock intrinsic value calculation we used $25.116139 million for the last fiscal year's total revenue generated by China Internet Nationwide Financial Serv. The default revenue input number comes from 0001 income statement of China Internet Nationwide Financial Serv. 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 CIFS stock valuation model: a) initial revenue growth rate of 58.7% 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 CIFS is calculated based on our internal credit rating of China Internet Nationwide Financial Serv, 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 China Internet Nationwide Financial Serv.
    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 CIFS stock the variable cost ratio is equal to 16%.

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 CIFS 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 China Internet Nationwide Financial Serv.

Corporate tax rate of 27% is the nominal tax rate for China Internet Nationwide Financial Serv. 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 CIFS 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 CIFS are equal to 2.7%.

Life of production assets of 31 years is the average useful life of capital assets used in China Internet Nationwide Financial Serv 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 CIFS is equal to -2.3%. 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 - $71.115776 million for China Internet Nationwide Financial Serv - 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 22.114 million for China Internet Nationwide Financial Serv 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 China Internet Nationwide Financial Serv at the current share price and the inputted number of shares is $0.0 billion.

COMPANY NEWS

▶ Carson Block on Short of China Internet Nationwide   [Dec-20-17 12:27PM  Bloomberg Video]
▶ Carson Block Shorts CIFS, Calls it 'Worthless'   [11:22AM  Bloomberg Video]

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