Intrinsic value of Hope Bancorp - HOPE

Previous Close

$17.39

  Intrinsic Value

$20.40

stock screener

  Rating & Target

hold

+17%

Previous close

$17.39

 
Intrinsic value

$20.40

 
Up/down potential

+17%

 
Rating

hold

We calculate the intrinsic value of HOPE 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 2017), $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 2.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  30.60
  28.04
  25.74
  23.66
  21.80
  20.12
  18.60
  17.24
  16.02
  14.92
  13.93
  13.03
  12.23
  11.51
  10.86
  10.27
  9.74
  9.27
  8.84
  8.46
  8.11
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
  6.34
  6.21
Revenue, $m
  692
  886
  1,114
  1,378
  1,678
  2,016
  2,391
  2,803
  3,253
  3,738
  4,258
  4,813
  5,402
  6,024
  6,678
  7,363
  8,081
  8,830
  9,611
  10,424
  11,269
  12,148
  13,062
  14,011
  14,998
  16,024
  17,090
  18,199
  19,353
  20,554
Variable operating expenses, $m
  287
  368
  462
  572
  697
  837
  992
  1,163
  1,350
  1,551
  1,767
  1,998
  2,242
  2,500
  2,771
  3,056
  3,354
  3,664
  3,988
  4,326
  4,677
  5,042
  5,421
  5,815
  6,224
  6,650
  7,092
  7,553
  8,031
  8,530
Fixed operating expenses, $m
  48
  49
  50
  51
  52
  54
  55
  56
  57
  58
  60
  61
  62
  64
  65
  67
  68
  70
  71
  73
  74
  76
  78
  79
  81
  83
  85
  86
  88
  90
Total operating expenses, $m
  335
  417
  512
  623
  749
  891
  1,047
  1,219
  1,407
  1,609
  1,827
  2,059
  2,304
  2,564
  2,836
  3,123
  3,422
  3,734
  4,059
  4,399
  4,751
  5,118
  5,499
  5,894
  6,305
  6,733
  7,177
  7,639
  8,119
  8,620
Operating income, $m
  357
  469
  602
  755
  929
  1,126
  1,344
  1,584
  1,846
  2,128
  2,431
  2,755
  3,098
  3,460
  3,841
  4,241
  4,659
  5,096
  5,551
  6,025
  6,518
  7,031
  7,564
  8,117
  8,693
  9,291
  9,913
  10,560
  11,233
  11,934
EBITDA, $m
  2,161
  2,779
  3,506
  4,346
  5,304
  6,380
  7,576
  8,890
  10,322
  11,870
  13,529
  15,299
  17,176
  19,159
  21,244
  23,432
  25,720
  28,109
  30,599
  33,191
  35,888
  38,692
  41,606
  44,634
  47,781
  51,052
  54,453
  57,990
  61,670
  65,500
Interest expense (income), $m
  63
  700
  799
  992
  1,218
  1,479
  1,777
  2,112
  2,484
  2,893
  3,339
  3,820
  4,336
  4,887
  5,471
  6,087
  6,736
  7,416
  8,128
  8,870
  9,645
  10,451
  11,290
  12,162
  13,068
  14,010
  14,988
  16,006
  17,063
  18,163
  19,307
Earnings before tax, $m
  -343
  -330
  -390
  -463
  -550
  -651
  -768
  -900
  -1,048
  -1,210
  -1,388
  -1,581
  -1,789
  -2,010
  -2,246
  -2,495
  -2,757
  -3,032
  -3,319
  -3,620
  -3,933
  -4,259
  -4,598
  -4,951
  -5,317
  -5,697
  -6,092
  -6,503
  -6,930
  -7,374
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
  -343
  -330
  -390
  -463
  -550
  -651
  -768
  -900
  -1,048
  -1,210
  -1,388
  -1,581
  -1,789
  -2,010
  -2,246
  -2,495
  -2,757
  -3,032
  -3,319
  -3,620
  -3,933
  -4,259
  -4,598
  -4,951
  -5,317
  -5,697
  -6,092
  -6,503
  -6,930
  -7,374

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
  14,126
  18,087
  22,742
  28,123
  34,253
  41,144
  48,798
  57,213
  66,379
  76,281
  86,904
  98,231
  110,245
  122,931
  136,277
  150,274
  164,916
  180,202
  196,137
  212,726
  229,984
  247,925
  266,571
  285,948
  306,085
  327,014
  348,774
  371,404
  394,951
  419,460
Adjusted assets (=assets-cash), $m
  14,126
  18,087
  22,742
  28,123
  34,253
  41,144
  48,798
  57,213
  66,379
  76,281
  86,904
  98,231
  110,245
  122,931
  136,277
  150,274
  164,916
  180,202
  196,137
  212,726
  229,984
  247,925
  266,571
  285,948
  306,085
  327,014
  348,774
  371,404
  394,951
  419,460
Revenue / Adjusted assets
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
  0.049
Average production assets, $m
  18,040
  23,098
  29,042
  35,914
  43,742
  52,542
  62,317
  73,064
  84,768
  97,414
  110,980
  125,445
  140,787
  156,987
  174,031
  191,905
  210,604
  230,125
  250,474
  271,660
  293,698
  316,609
  340,422
  365,167
  390,882
  417,609
  445,397
  474,298
  504,367
  535,667
Working capital, $m
  -15,363
  -19,671
  -24,733
  -30,586
  -37,252
  -44,746
  -53,071
  -62,223
  -72,191
  -82,960
  -94,513
  -106,832
  -119,897
  -133,694
  -148,209
  -163,431
  -179,355
  -195,980
  -213,310
  -231,352
  -250,120
  -269,632
  -289,911
  -310,984
  -332,884
  -355,646
  -379,311
  -403,923
  -429,531
  -456,186
Total debt, $m
  14,799
  18,364
  22,553
  27,396
  32,913
  39,115
  46,004
  53,577
  61,826
  70,739
  80,299
  90,493
  101,306
  112,723
  124,735
  137,332
  150,510
  164,268
  178,609
  193,539
  209,071
  225,218
  242,000
  259,439
  277,562
  296,398
  315,982
  336,349
  357,541
  379,600
Total liabilities, $m
  12,714
  16,278
  20,468
  25,311
  30,828
  37,029
  43,918
  51,492
  59,741
  68,653
  78,214
  88,408
  99,220
  110,638
  122,649
  135,246
  148,424
  162,182
  176,523
  191,454
  206,985
  223,132
  239,914
  257,353
  275,476
  294,313
  313,896
  334,264
  355,456
  377,514
Total equity, $m
  1,413
  1,809
  2,274
  2,812
  3,425
  4,114
  4,880
  5,721
  6,638
  7,628
  8,690
  9,823
  11,024
  12,293
  13,628
  15,027
  16,492
  18,020
  19,614
  21,273
  22,998
  24,792
  26,657
  28,595
  30,608
  32,701
  34,877
  37,140
  39,495
  41,946
Total liabilities and equity, $m
  14,127
  18,087
  22,742
  28,123
  34,253
  41,143
  48,798
  57,213
  66,379
  76,281
  86,904
  98,231
  110,244
  122,931
  136,277
  150,273
  164,916
  180,202
  196,137
  212,727
  229,983
  247,924
  266,571
  285,948
  306,084
  327,014
  348,773
  371,404
  394,951
  419,460
Debt-to-equity ratio
  10.480
  10.150
  9.920
  9.740
  9.610
  9.510
  9.430
  9.360
  9.310
  9.270
  9.240
  9.210
  9.190
  9.170
  9.150
  9.140
  9.130
  9.120
  9.110
  9.100
  9.090
  9.080
  9.080
  9.070
  9.070
  9.060
  9.060
  9.060
  9.050
  9.050
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
  -343
  -330
  -390
  -463
  -550
  -651
  -768
  -900
  -1,048
  -1,210
  -1,388
  -1,581
  -1,789
  -2,010
  -2,246
  -2,495
  -2,757
  -3,032
  -3,319
  -3,620
  -3,933
  -4,259
  -4,598
  -4,951
  -5,317
  -5,697
  -6,092
  -6,503
  -6,930
  -7,374
Depreciation, amort., depletion, $m
  1,804
  2,310
  2,904
  3,591
  4,374
  5,254
  6,232
  7,306
  8,477
  9,741
  11,098
  12,544
  14,079
  15,699
  17,403
  19,191
  21,060
  23,013
  25,047
  27,166
  29,370
  31,661
  34,042
  36,517
  39,088
  41,761
  44,540
  47,430
  50,437
  53,567
Funds from operations, $m
  1,461
  1,980
  2,514
  3,128
  3,824
  4,603
  5,464
  6,406
  7,429
  8,531
  9,710
  10,963
  12,290
  13,688
  15,157
  16,696
  18,304
  19,981
  21,728
  23,546
  25,437
  27,402
  29,444
  31,566
  33,771
  36,064
  38,447
  40,927
  43,507
  46,193
Change in working capital, $m
  -3,600
  -4,308
  -5,062
  -5,852
  -6,666
  -7,494
  -8,325
  -9,152
  -9,968
  -10,769
  -11,553
  -12,318
  -13,066
  -13,797
  -14,514
  -15,222
  -15,924
  -16,625
  -17,329
  -18,042
  -18,768
  -19,512
  -20,279
  -21,073
  -21,900
  -22,762
  -23,665
  -24,612
  -25,608
  -26,656
Cash from operations, $m
  5,061
  6,288
  7,577
  8,981
  10,491
  12,097
  13,789
  15,558
  17,397
  19,300
  21,263
  23,281
  25,356
  27,485
  29,672
  31,918
  34,228
  36,606
  39,058
  41,588
  44,205
  46,914
  49,723
  52,640
  55,671
  58,826
  62,112
  65,539
  69,115
  72,849
Maintenance CAPEX, $m
  -1,382
  -1,804
  -2,310
  -2,904
  -3,591
  -4,374
  -5,254
  -6,232
  -7,306
  -8,477
  -9,741
  -11,098
  -12,544
  -14,079
  -15,699
  -17,403
  -19,191
  -21,060
  -23,013
  -25,047
  -27,166
  -29,370
  -31,661
  -34,042
  -36,517
  -39,088
  -41,761
  -44,540
  -47,430
  -50,437
New CAPEX, $m
  -4,216
  -5,058
  -5,944
  -6,872
  -7,828
  -8,799
  -9,775
  -10,746
  -11,705
  -12,646
  -13,566
  -14,465
  -15,342
  -16,201
  -17,043
  -17,874
  -18,699
  -19,522
  -20,349
  -21,186
  -22,038
  -22,912
  -23,812
  -24,745
  -25,715
  -26,728
  -27,788
  -28,900
  -30,069
  -31,300
Cash from investing activities, $m
  -5,598
  -6,862
  -8,254
  -9,776
  -11,419
  -13,173
  -15,029
  -16,978
  -19,011
  -21,123
  -23,307
  -25,563
  -27,886
  -30,280
  -32,742
  -35,277
  -37,890
  -40,582
  -43,362
  -46,233
  -49,204
  -52,282
  -55,473
  -58,787
  -62,232
  -65,816
  -69,549
  -73,440
  -77,499
  -81,737
Free cash flow, $m
  -537
  -574
  -677
  -795
  -929
  -1,077
  -1,241
  -1,420
  -1,614
  -1,822
  -2,045
  -2,281
  -2,531
  -2,794
  -3,070
  -3,359
  -3,661
  -3,976
  -4,304
  -4,645
  -4,999
  -5,367
  -5,750
  -6,148
  -6,561
  -6,990
  -7,437
  -7,901
  -8,385
  -8,888
Issuance/(repayment) of debt, $m
  1,845
  3,565
  4,189
  4,843
  5,517
  6,201
  6,889
  7,573
  8,249
  8,912
  9,561
  10,194
  10,812
  11,417
  12,011
  12,597
  13,178
  13,758
  14,341
  14,931
  15,531
  16,147
  16,782
  17,439
  18,123
  18,837
  19,584
  20,368
  21,192
  22,059
Issuance/(repurchase) of shares, $m
  1,777
  726
  855
  1,001
  1,163
  1,341
  1,534
  1,742
  1,964
  2,201
  2,451
  2,714
  2,990
  3,279
  3,580
  3,894
  4,221
  4,560
  4,913
  5,279
  5,659
  6,053
  6,463
  6,888
  7,330
  7,790
  8,268
  8,766
  9,285
  9,825
Cash from financing (excl. dividends), $m  
  3,622
  4,291
  5,044
  5,844
  6,680
  7,542
  8,423
  9,315
  10,213
  11,113
  12,012
  12,908
  13,802
  14,696
  15,591
  16,491
  17,399
  18,318
  19,254
  20,210
  21,190
  22,200
  23,245
  24,327
  25,453
  26,627
  27,852
  29,134
  30,477
  31,884
Total cash flow (excl. dividends), $m
  3,085
  3,716
  4,367
  5,049
  5,751
  6,465
  7,182
  7,895
  8,599
  9,291
  9,967
  10,627
  11,272
  11,902
  12,521
  13,132
  13,738
  14,342
  14,950
  15,565
  16,191
  16,833
  17,494
  18,180
  18,893
  19,637
  20,415
  21,233
  22,092
  22,996
Retained Cash Flow (-), $m
  -1,777
  -726
  -855
  -1,001
  -1,163
  -1,341
  -1,534
  -1,742
  -1,964
  -2,201
  -2,451
  -2,714
  -2,990
  -3,279
  -3,580
  -3,894
  -4,221
  -4,560
  -4,913
  -5,279
  -5,659
  -6,053
  -6,463
  -6,888
  -7,330
  -7,790
  -8,268
  -8,766
  -9,285
  -9,825
Prev. year cash balance distribution, $m
  22
  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
  3
  4
  5
  7
  8
  10
  12
  14
  17
  20
  22
  26
  29
  32
  36
  40
  44
  48
  53
  58
  63
  68
  73
  78
  84
  90
  96
  103
  109
  116
Cash available for distribution, $m
  1,330
  2,990
  3,512
  4,048
  4,588
  5,124
  5,648
  6,153
  6,635
  7,090
  7,516
  7,913
  8,281
  8,623
  8,941
  9,238
  9,517
  9,782
  10,037
  10,286
  10,532
  10,780
  11,032
  11,292
  11,562
  11,846
  12,147
  12,466
  12,807
  13,171
Discount rate, %
  14.80
  15.54
  16.32
  17.13
  17.99
  18.89
  19.83
  20.83
  21.87
  22.96
  24.11
  25.31
  26.58
  27.91
  29.30
  30.77
  32.31
  33.92
  35.62
  37.40
  39.27
  41.23
  43.29
  45.46
  47.73
  50.12
  52.62
  55.26
  58.02
  60.92
PV of cash for distribution, $m
  1,158
  2,240
  2,232
  2,150
  2,006
  1,815
  1,592
  1,355
  1,119
  897
  699
  528
  387
  275
  189
  126
  82
  51
  31
  18
  10
  5
  3
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  33.0
  22.4
  15.6
  11.0
  7.9
  5.8
  4.3
  3.2
  2.4
  1.8
  1.4
  1.1
  0.8
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0

Hope Bancorp, Inc., formerly BBCN Bancorp, Inc., is the holding company of Bank of Hope. Bank of Hope is the regional Korean-American bank in the United States. Bank of Hope operates approximately 85 full-service branches in California, Washington, Texas, Illinois, New York, New Jersey, Virginia, Georgia and Alabama. The Bank also operates small business administration (SBA) loan production offices in Seattle, Denver, Dallas, Atlanta, Northern California, Annandale, Virginia, Portland, Oregon and Fremont, California; residential mortgage loan production offices in California, and a representative office in Seoul, Korea. Bank of Hope specializes in business banking products for small and medium-sized businesses, with an emphasis in commercial real estate and commercial lending, SBA lending and international trade financing. Bank of Hope is a California-chartered bank, and its deposits are insured by the Federal Deposit Insurance Corporation (FDIC).

FINANCIAL RATIOS  of  Hope Bancorp (HOPE)

Valuation Ratios
P/E Ratio 20.6
Price to Sales 0
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 18
Price to Free Cash Flow 20.1
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 27.3%
Cap. Spend. - 3 Yr. Gr. Rate 9.2%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 5.4%
Total Debt to Equity 5.4%
Interest Coverage 4
Management Effectiveness
Return On Assets 1.4%
Ret/ On Assets - 3 Yr. Avg. 1.5%
Return On Total Capital 7.8%
Ret/ On T. Cap. - 3 Yr. Avg. 9.1%
Return On Equity 8.2%
Return On Equity - 3 Yr. Avg. 9.6%
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 40.3%
Eff/ Tax Rate - 3 Yr. Avg. 40.1%
Payout Ratio 36.8%

HOPE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HOPE stock intrinsic value calculation we used $530 million for the last fiscal year's total revenue generated by Hope Bancorp. The default revenue input number comes from 2017 income statement of Hope Bancorp. 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 HOPE stock valuation model: a) initial revenue growth rate of 30.6% 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 14.8%, whose default value for HOPE is calculated based on our internal credit rating of Hope Bancorp, 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 Hope Bancorp.
    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 HOPE stock the variable cost ratio is equal to 41.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $47 million in the base year in the intrinsic value calculation for HOPE 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 Hope Bancorp.

Corporate tax rate of 27% is the nominal tax rate for Hope Bancorp. 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 HOPE stock is equal to 0.6%.

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 HOPE are equal to 2606.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Hope Bancorp 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 HOPE is equal to -2219.5%. 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 - $0 million for Hope Bancorp - 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 135 million for Hope Bancorp 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 Hope Bancorp at the current share price and the inputted number of shares is $2.3 billion.

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COMPANY NEWS

▶ Hope Bancorp, Inc. to Host Earnings Call   [Jul-18-18 10:30AM  ACCESSWIRE]
▶ Hope Bancorp: 2Q Earnings Snapshot   [Jul-17-18 04:41PM  Associated Press]
▶ Earnings Preview: Hope Bancorp   [09:19AM  Benzinga]
▶ Hope Bancorp Prices $200 Million Convertible Notes Offering   [May-08-18 08:55PM  GlobeNewswire]
▶ Hope Bancorp: 1Q Earnings Snapshot   [Apr-17-18 04:49PM  Associated Press]
▶ Does Hope Bancorp Incs (NASDAQ:HOPE) PE Ratio Warrant A Sell?   [Apr-16-18 03:38PM  Simply Wall St.]
▶ Hope Bancorp, Inc. to Host Earnings Call   [Jan-31-18 09:00AM  ACCESSWIRE]
▶ Hope Bancorp tops Street 4Q forecasts   [Jan-30-18 04:45PM  Associated Press]
▶ Is Hope Well Capital Corp (TSXV:HOPEP) Cheap And High Growth?   [Nov-20-17 01:57PM  Simply Wall St.]
▶ IIROC Trading Halt - HOPE.P   [09:12AM  PR Newswire]
▶ Hope Bancorp, Inc. to Host Earnings Call   [Oct-25-17 07:35AM  ACCESSWIRE]
▶ Hope Bancorp tops Street 3Q forecasts   [Oct-24-17 05:25PM  Associated Press]
▶ ETFs with exposure to Hope Bancorp, Inc. : August 4, 2017   [Aug-04-17 07:38PM  Capital Cube]
▶ Hope Bancorp misses Street 2Q forecasts   [12:13AM  Associated Press]
▶ Hope Bancorp Reports 2017 Second Quarter Financial Results   [Jul-25-17 04:30PM  GlobeNewswire]
▶ ETFs with exposure to Hope Bancorp, Inc. : July 24, 2017   [Jul-24-17 04:31PM  Capital Cube]
▶ ETFs with exposure to Hope Bancorp, Inc. : July 14, 2017   [Jul-14-17 02:55PM  Capital Cube]
▶ Hope Bancorp Receives Anticipated Nasdaq Notice   [May-22-17 04:30PM  GlobeNewswire]
▶ Hope Bancorp Files 2016 Annual Report on Form 10-K   [May-18-17 07:30AM  GlobeNewswire]
▶ Hope Bancorp Extends CEO Kevin Kims Employment Agreement   [May-03-17 09:00AM  GlobeNewswire]
▶ Hope Bancorp misses Street 1Q forecasts   [05:01AM  Associated Press]
▶ Hope Bancorp Reports 2017 First Quarter Financial Results   [Apr-27-17 11:00PM  GlobeNewswire]
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