Intrinsic value of Future FinTech Group - FTFT

Previous Close

$1.22

  Intrinsic Value

$1.86

stock screener

  Rating & Target

str. buy

+52%

Previous close

$1.22

 
Intrinsic value

$1.86

 
Up/down potential

+52%

 
Rating

str. buy

We calculate the intrinsic value of FTFT 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
  11
  11
  11
  12
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  33
  34
Variable operating expenses, $m
  10
  10
  10
  10
  10
  10
  11
  11
  11
  12
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
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
  10
  10
  10
  10
  10
  10
  11
  11
  11
  12
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
Operating income, $m
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  14
EBITDA, $m
  7
  7
  7
  8
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  19
  20
  21
  22
Interest expense (income), $m
  1
  3
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  11
  12
  12
  13
  14
  15
  17
  18
  19
  20
  22
  23
  25
  26
  28
  30
Earnings before tax, $m
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -2
  -2
  -2
  -3
  -3
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -15
  -16
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
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -2
  -2
  -2
  -3
  -3
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -15
  -16

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
  205
  210
  215
  221
  228
  235
  244
  252
  262
  272
  282
  294
  306
  319
  333
  347
  363
  379
  396
  414
  434
  454
  475
  498
  522
  546
  573
  600
  629
  660
Adjusted assets (=assets-cash), $m
  205
  210
  215
  221
  228
  235
  244
  252
  262
  272
  282
  294
  306
  319
  333
  347
  363
  379
  396
  414
  434
  454
  475
  498
  522
  546
  573
  600
  629
  660
Revenue / Adjusted assets
  0.054
  0.052
  0.051
  0.054
  0.053
  0.051
  0.053
  0.052
  0.053
  0.051
  0.053
  0.051
  0.052
  0.053
  0.051
  0.052
  0.052
  0.053
  0.053
  0.053
  0.053
  0.053
  0.053
  0.052
  0.052
  0.051
  0.052
  0.052
  0.052
  0.052
Average production assets, $m
  76
  78
  80
  82
  84
  87
  90
  93
  97
  100
  104
  109
  113
  118
  123
  128
  134
  140
  146
  153
  160
  168
  176
  184
  193
  202
  212
  222
  233
  244
Working capital, $m
  -130
  -133
  -137
  -140
  -145
  -149
  -154
  -160
  -166
  -172
  -179
  -186
  -194
  -202
  -211
  -220
  -230
  -240
  -251
  -263
  -275
  -288
  -301
  -316
  -331
  -347
  -363
  -381
  -399
  -419
Total debt, $m
  53
  57
  62
  67
  73
  80
  87
  95
  103
  112
  122
  132
  143
  155
  167
  180
  194
  209
  224
  241
  258
  276
  296
  316
  337
  360
  383
  408
  434
  462
Total liabilities, $m
  185
  189
  194
  199
  205
  212
  219
  227
  235
  244
  254
  264
  275
  287
  299
  313
  326
  341
  357
  373
  390
  409
  428
  448
  469
  492
  515
  540
  567
  594
Total equity, $m
  21
  21
  22
  22
  23
  24
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
  40
  41
  43
  45
  48
  50
  52
  55
  57
  60
  63
  66
Total liabilities and equity, $m
  206
  210
  216
  221
  228
  236
  243
  252
  261
  271
  282
  293
  306
  319
  332
  348
  362
  379
  397
  414
  433
  454
  476
  498
  521
  547
  572
  600
  630
  660
Debt-to-equity ratio
  2.560
  2.700
  2.860
  3.030
  3.210
  3.390
  3.570
  3.760
  3.950
  4.130
  4.320
  4.500
  4.680
  4.860
  5.030
  5.190
  5.360
  5.510
  5.660
  5.810
  5.950
  6.090
  6.220
  6.340
  6.470
  6.580
  6.690
  6.800
  6.900
  7.000
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
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -2
  -2
  -2
  -3
  -3
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -15
  -16
Depreciation, amort., depletion, $m
  6
  6
  6
  6
  6
  6
  6
  6
  7
  7
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
Funds from operations, $m
  4
  4
  3
  3
  3
  3
  3
  3
  2
  2
  2
  2
  1
  1
  1
  0
  0
  -1
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -5
  -5
  -6
  -7
  -8
Change in working capital, $m
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -18
  -19
Cash from operations, $m
  6
  7
  7
  7
  7
  8
  8
  8
  8
  8
  9
  9
  9
  9
  9
  10
  10
  10
  10
  10
  10
  10
  11
  11
  11
  11
  11
  11
  12
  12
Maintenance CAPEX, $m
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
New CAPEX, $m
  -5
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
Cash from investing activities, $m
  -7
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -9
  -9
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -12
  -14
  -14
  -15
  -15
  -17
  -17
  -18
  -19
Free cash flow, $m
  -1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  1
  1
  1
  1
  0
  0
  0
  -1
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -5
  -5
  -6
  -6
  -7
Issuance/(repayment) of debt, $m
  7
  4
  5
  5
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  12
  13
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  24
  25
  26
  28
Issuance/(repurchase) of shares, $m
  10
  3
  3
  3
  4
  4
  4
  5
  5
  6
  3
  3
  4
  4
  5
  5
  6
  7
  8
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  19
Cash from financing (excl. dividends), $m  
  17
  7
  8
  8
  10
  11
  11
  13
  13
  15
  13
  13
  15
  16
  17
  18
  20
  22
  24
  24
  26
  28
  30
  32
  34
  36
  39
  41
  43
  47
Total cash flow (excl. dividends), $m
  16
  9
  10
  11
  12
  13
  14
  14
  15
  16
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  34
  35
  37
  39
Retained Cash Flow (-), $m
  -10
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -7
  -8
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -19
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
  6
  6
  7
  8
  8
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
  14
  15
  15
  16
  16
  17
  17
  18
  19
  19
  20
  20
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
  6
  6
  6
  6
  6
  6
  6
  6
  6
  6
  5
  5
  5
  4
  4
  3
  3
  3
  2
  2
  2
  1
  1
  1
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  76.2
  72.2
  68.2
  64.2
  60.2
  56.3
  52.5
  48.8
  45.1
  41.6
  40.0
  38.3
  36.5
  34.6
  32.6
  30.6
  28.6
  26.6
  24.7
  22.8
  20.9
  19.2
  17.5
  15.9
  14.5
  13.1
  11.8
  10.6
  9.5
  8.5

Future FinTech Group Inc., formerly SkyPeople Fruit Juice, Inc., is a holding company. The Company is engaged in the production and sale of fruit juice concentrates, including fruit purees, concentrated fruit purees and concentrated fruit juices; fruit beverages, including fruit juice beverages and fruit cider beverages, and other fruit-related products, including primarily organic and non-organic fresh fruits, dried fruit, preserved fruit, fructose in and from the People's Republic of China (PRC). The Company operates through six segments: concentrated apple juice and apple aroma, concentrated kiwifruit juice and kiwifruit puree, concentrated pear juice, fruit juice beverages, fresh fruits and vegetables, and others. Its concentrated apple juice and apple aroma is primarily produced by the Company's Huludao Wonder factory; concentrated pear juice is primarily produced by the Company's Jiangyang factory. Its other products include fructose and concentrated turnjujube juice.

FINANCIAL RATIOS  of  Future FinTech Group (FTFT)

Valuation Ratios
P/E Ratio -0.8
Price to Sales 0.1
Price to Book 0
Price to Tangible Book
Price to Cash Flow -0.1
Price to Free Cash Flow -0.1
Growth Rates
Sales Growth Rate -60.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -18.2%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 11.1%
Total Debt to Equity 32.6%
Interest Coverage 2
Management Effectiveness
Return On Assets -2.6%
Ret/ On Assets - 3 Yr. Avg. 1.2%
Return On Total Capital -2.9%
Ret/ On T. Cap. - 3 Yr. Avg. 0.6%
Return On Equity -3.8%
Return On Equity - 3 Yr. Avg. 0.8%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 26.5%
Gross Margin - 3 Yr. Avg. 28.7%
EBITDA Margin 20.6%
EBITDA Margin - 3 Yr. Avg. 22.7%
Operating Margin 5.9%
Oper. Margin - 3 Yr. Avg. 11.6%
Pre-Tax Margin 2.9%
Pre-Tax Margin - 3 Yr. Avg. 8.5%
Net Profit Margin -17.6%
Net Profit Margin - 3 Yr. Avg. -2%
Effective Tax Rate 200%
Eff/ Tax Rate - 3 Yr. Avg. 93.6%
Payout Ratio 0%

FTFT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FTFT stock intrinsic value calculation we used $10.463135 million for the last fiscal year's total revenue generated by Future FinTech Group. The default revenue input number comes from 0001 income statement of Future FinTech Group. 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 FTFT 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 4.3%, whose default value for FTFT is calculated based on our internal credit rating of Future FinTech Group, 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 Future FinTech Group.
    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 FTFT stock the variable cost ratio is equal to 90%.

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 FTFT 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 6.9% for Future FinTech Group.

Corporate tax rate of 27% is the nominal tax rate for Future FinTech Group. 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 FTFT 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 FTFT are equal to 710.4%.

Life of production assets of 129.4 years is the average useful life of capital assets used in Future FinTech Group 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 FTFT is equal to -1219.5%. 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 - $12.606785 million for Future FinTech Group - 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 26.071 million for Future FinTech Group 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 Future FinTech Group at the current share price and the inputted number of shares is $0.0 billion.

COMPANY NEWS

▶ Future FinTech Announces New Juice Products   [Aug-23-18 09:30AM  PR Newswire]
▶ Future FinTech Establishes DCON DigiPay in Japan   [Mar-15-18 09:00AM  PR Newswire]
▶ Future FinTech Announces New Management Team Hires   [Feb-09-18 02:00PM  PR Newswire]
▶ Future FinTech Announces Special Shareholders Meeting   [Jan-22-18 09:00AM  PR Newswire]
▶ Future FinTech to Amend Preliminary Proxy Statement   [Oct-31-17 09:00AM  PR Newswire]
▶ Future FinTech Signs License Agreement   [Sep-21-17 09:00AM  PR Newswire]

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