Intrinsic value of Cementos Pacasmayo S.A.A. - CPAC

Previous Close

$9.79

  Intrinsic Value

$2.25

stock screener

  Rating & Target

str. sell

-77%

Previous close

$9.79

 
Intrinsic value

$2.25

 
Up/down potential

-77%

 
Rating

str. sell

We calculate the intrinsic value of CPAC 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, %
  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
  385
  393
  403
  415
  427
  441
  456
  473
  490
  509
  529
  550
  573
  598
  623
  651
  680
  710
  742
  777
  813
  851
  891
  933
  977
  1,024
  1,073
  1,125
  1,179
  1,237
Variable operating expenses, $m
  300
  307
  315
  324
  333
  344
  356
  369
  382
  397
  413
  429
  447
  466
  486
  508
  530
  554
  579
  606
  634
  663
  695
  728
  762
  799
  837
  877
  920
  965
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
  300
  307
  315
  324
  333
  344
  356
  369
  382
  397
  413
  429
  447
  466
  486
  508
  530
  554
  579
  606
  634
  663
  695
  728
  762
  799
  837
  877
  920
  965
Operating income, $m
  85
  87
  89
  91
  94
  97
  100
  104
  108
  112
  116
  121
  126
  131
  137
  143
  150
  156
  163
  171
  179
  187
  196
  205
  215
  225
  236
  247
  259
  272
EBITDA, $m
  124
  126
  130
  133
  137
  142
  147
  152
  157
  163
  170
  177
  184
  192
  200
  209
  218
  228
  239
  250
  261
  273
  286
  300
  314
  329
  345
  361
  379
  397
Interest expense (income), $m
  0
  23
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
  47
  50
  52
  55
  58
  61
  64
  68
  71
  75
  79
  83
  88
Earnings before tax, $m
  62
  63
  65
  66
  68
  70
  73
  75
  77
  80
  83
  86
  89
  93
  97
  101
  105
  109
  114
  119
  124
  129
  135
  141
  147
  154
  161
  168
  176
  184
Tax expense, $m
  17
  17
  17
  18
  18
  19
  20
  20
  21
  22
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
  40
  42
  43
  45
  48
  50
Net income, $m
  45
  46
  47
  49
  50
  51
  53
  55
  57
  59
  61
  63
  65
  68
  71
  73
  76
  80
  83
  87
  90
  94
  98
  103
  107
  112
  117
  123
  129
  135

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
  884
  904
  928
  954
  983
  1,014
  1,049
  1,086
  1,127
  1,170
  1,216
  1,265
  1,318
  1,374
  1,433
  1,496
  1,562
  1,633
  1,707
  1,785
  1,868
  1,955
  2,047
  2,144
  2,246
  2,354
  2,467
  2,586
  2,711
  2,843
Adjusted assets (=assets-cash), $m
  884
  904
  928
  954
  983
  1,014
  1,049
  1,086
  1,127
  1,170
  1,216
  1,265
  1,318
  1,374
  1,433
  1,496
  1,562
  1,633
  1,707
  1,785
  1,868
  1,955
  2,047
  2,144
  2,246
  2,354
  2,467
  2,586
  2,711
  2,843
Revenue / Adjusted assets
  0.436
  0.435
  0.434
  0.435
  0.434
  0.435
  0.435
  0.436
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
  0.435
Average production assets, $m
  701
  717
  736
  756
  779
  804
  832
  861
  893
  928
  964
  1,003
  1,045
  1,089
  1,136
  1,186
  1,239
  1,295
  1,354
  1,416
  1,481
  1,551
  1,624
  1,700
  1,781
  1,867
  1,956
  2,051
  2,150
  2,254
Working capital, $m
  94
  96
  98
  101
  104
  108
  111
  115
  120
  124
  129
  134
  140
  146
  152
  159
  166
  173
  181
  189
  198
  208
  217
  228
  238
  250
  262
  274
  288
  302
Total debt, $m
  306
  315
  326
  338
  352
  366
  382
  400
  419
  439
  460
  483
  508
  533
  561
  590
  621
  654
  688
  725
  763
  804
  847
  892
  939
  989
  1,042
  1,097
  1,155
  1,217
Total liabilities, $m
  411
  421
  431
  443
  457
  472
  488
  505
  524
  544
  565
  588
  613
  639
  666
  696
  726
  759
  794
  830
  869
  909
  952
  997
  1,045
  1,095
  1,147
  1,202
  1,261
  1,322
Total equity, $m
  473
  484
  496
  510
  526
  543
  561
  581
  603
  626
  651
  677
  705
  735
  767
  800
  836
  873
  913
  955
  999
  1,046
  1,095
  1,147
  1,202
  1,259
  1,320
  1,383
  1,450
  1,521
Total liabilities and equity, $m
  884
  905
  927
  953
  983
  1,015
  1,049
  1,086
  1,127
  1,170
  1,216
  1,265
  1,318
  1,374
  1,433
  1,496
  1,562
  1,632
  1,707
  1,785
  1,868
  1,955
  2,047
  2,144
  2,247
  2,354
  2,467
  2,585
  2,711
  2,843
Debt-to-equity ratio
  0.650
  0.650
  0.660
  0.660
  0.670
  0.680
  0.680
  0.690
  0.690
  0.700
  0.710
  0.710
  0.720
  0.730
  0.730
  0.740
  0.740
  0.750
  0.750
  0.760
  0.760
  0.770
  0.770
  0.780
  0.780
  0.790
  0.790
  0.790
  0.800
  0.800
Adjusted equity ratio
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  45
  46
  47
  49
  50
  51
  53
  55
  57
  59
  61
  63
  65
  68
  71
  73
  76
  80
  83
  87
  90
  94
  98
  103
  107
  112
  117
  123
  129
  135
Depreciation, amort., depletion, $m
  39
  40
  41
  42
  43
  45
  46
  48
  50
  52
  54
  56
  58
  61
  63
  66
  69
  72
  75
  79
  82
  86
  90
  94
  99
  104
  109
  114
  119
  125
Funds from operations, $m
  84
  86
  88
  91
  93
  96
  99
  103
  106
  110
  114
  119
  123
  128
  134
  139
  145
  152
  158
  165
  173
  180
  189
  197
  206
  216
  226
  237
  248
  260
Change in working capital, $m
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
Cash from operations, $m
  82
  84
  86
  88
  90
  93
  95
  99
  102
  105
  109
  113
  118
  122
  127
  133
  138
  144
  150
  157
  164
  171
  179
  187
  196
  205
  214
  224
  235
  246
Maintenance CAPEX, $m
  -38
  -39
  -40
  -41
  -42
  -43
  -45
  -46
  -48
  -50
  -52
  -54
  -56
  -58
  -61
  -63
  -66
  -69
  -72
  -75
  -79
  -82
  -86
  -90
  -94
  -99
  -104
  -109
  -114
  -119
New CAPEX, $m
  -14
  -16
  -18
  -21
  -23
  -25
  -27
  -30
  -32
  -34
  -37
  -39
  -42
  -44
  -47
  -50
  -53
  -56
  -59
  -62
  -66
  -69
  -73
  -77
  -81
  -85
  -90
  -94
  -99
  -104
Cash from investing activities, $m
  -52
  -55
  -58
  -62
  -65
  -68
  -72
  -76
  -80
  -84
  -89
  -93
  -98
  -102
  -108
  -113
  -119
  -125
  -131
  -137
  -145
  -151
  -159
  -167
  -175
  -184
  -194
  -203
  -213
  -223
Free cash flow, $m
  30
  29
  27
  26
  25
  24
  23
  23
  22
  22
  21
  21
  20
  20
  20
  20
  20
  19
  19
  19
  20
  20
  20
  20
  20
  20
  21
  21
  21
  22
Issuance/(repayment) of debt, $m
  9
  9
  11
  12
  13
  15
  16
  17
  19
  20
  22
  23
  24
  26
  28
  29
  31
  33
  35
  36
  38
  41
  43
  45
  47
  50
  53
  55
  58
  61
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  
  9
  9
  11
  12
  13
  15
  16
  17
  19
  20
  22
  23
  24
  26
  28
  29
  31
  33
  35
  36
  38
  41
  43
  45
  47
  50
  53
  55
  58
  61
Total cash flow (excl. dividends), $m
  39
  38
  38
  38
  39
  39
  39
  40
  41
  42
  43
  44
  45
  46
  47
  49
  50
  52
  54
  56
  58
  60
  63
  65
  68
  70
  73
  76
  80
  83
Retained Cash Flow (-), $m
  -9
  -11
  -12
  -14
  -15
  -17
  -18
  -20
  -22
  -23
  -25
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -42
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -70
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
  30
  27
  26
  24
  23
  22
  21
  20
  19
  19
  18
  17
  17
  16
  16
  15
  15
  15
  14
  14
  14
  14
  13
  13
  13
  13
  13
  13
  13
  13
Discount rate, %
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
  28
  24
  21
  18
  16
  14
  12
  10
  9
  7
  6
  5
  4
  3
  3
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
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

Cementos Pacasmayo S.A.A., a cement company, produces, distributes, and sells cement and cement-related materials in the northern region of Peru. It operates in three segments: Cement, Concrete and Blocks; Quicklime; and Sales of Construction Supplies. The company’s products include concrete blocks, cement bricks, and ready-mix concrete, which are primarily used in construction; and quicklime for use in mining operations. It also distributes and sells other construction materials manufactured by third parties, such as steel rebars, plastic pipes, plastic pipes and electrical wires, and others that are used in construction. The company was incorporated in 1949 and is headquartered in Lima, Peru. Cementos Pacasmayo S.A.A. is a subsidiary of Inversiones ASPI S.A.

FINANCIAL RATIOS  of  Cementos Pacasmayo S.A.A. (CPAC)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
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 NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

CPAC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CPAC stock intrinsic value calculation we used $377 million for the last fiscal year's total revenue generated by Cementos Pacasmayo S.A.A.. The default revenue input number comes from 0001 income statement of Cementos Pacasmayo S.A.A.. 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 CPAC 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 6.2%, whose default value for CPAC is calculated based on our internal credit rating of Cementos Pacasmayo S.A.A., 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 Cementos Pacasmayo S.A.A..
    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 CPAC stock the variable cost ratio is equal to 78%.

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 CPAC 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 7.6% for Cementos Pacasmayo S.A.A..

Corporate tax rate of 27% is the nominal tax rate for Cementos Pacasmayo S.A.A.. 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 CPAC 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 CPAC are equal to 182.3%.

Life of production assets of 18 years is the average useful life of capital assets used in Cementos Pacasmayo S.A.A. 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 CPAC is equal to 24.4%. 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 - $463.556923077 million for Cementos Pacasmayo S.A.A. - 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 84.773 million for Cementos Pacasmayo S.A.A. 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 Cementos Pacasmayo S.A.A. at the current share price and the inputted number of shares is $0.8 billion.

RELATED COMPANIES Price Int.Val. Rating
CRH CRH PLC 31.58 30.49  hold

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