Intrinsic value of JMU Limited - JMU

Previous Close

$1.08

  Intrinsic Value

$0.31

stock screener

  Rating & Target

str. sell

-71%

Previous close

$1.08

 
Intrinsic value

$0.31

 
Up/down potential

-71%

 
Rating

str. sell

We calculate the intrinsic value of JMU 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 0.1

 

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, %
  21.20
  19.58
  18.12
  16.81
  15.63
  14.57
  13.61
  12.75
  11.97
  11.28
  10.65
  10.08
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
Revenue, $m
  108
  129
  152
  178
  206
  236
  268
  302
  338
  376
  416
  458
  502
  548
  596
  645
  697
  751
  807
  864
  925
  987
  1,052
  1,120
  1,191
  1,264
  1,341
  1,420
  1,503
  1,590
Variable operating expenses, $m
  149
  178
  210
  246
  284
  326
  370
  417
  467
  519
  574
  632
  693
  756
  822
  890
  962
  1,036
  1,113
  1,193
  1,276
  1,362
  1,452
  1,546
  1,643
  1,744
  1,850
  1,960
  2,074
  2,194
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
  149
  178
  210
  246
  284
  326
  370
  417
  467
  519
  574
  632
  693
  756
  822
  890
  962
  1,036
  1,113
  1,193
  1,276
  1,362
  1,452
  1,546
  1,643
  1,744
  1,850
  1,960
  2,074
  2,194
Operating income, $m
  -41
  -49
  -58
  -68
  -78
  -90
  -102
  -115
  -129
  -143
  -158
  -174
  -191
  -208
  -226
  -245
  -265
  -285
  -306
  -328
  -351
  -375
  -400
  -425
  -452
  -480
  -509
  -539
  -571
  -604
EBITDA, $m
  -36
  -43
  -50
  -59
  -68
  -78
  -89
  -100
  -112
  -125
  -138
  -152
  -166
  -181
  -197
  -214
  -231
  -248
  -267
  -286
  -306
  -327
  -348
  -371
  -394
  -418
  -444
  -470
  -497
  -526
Interest expense (income), $m
  0
  1
  2
  2
  3
  4
  5
  7
  8
  9
  11
  12
  14
  15
  17
  19
  21
  23
  25
  27
  29
  31
  33
  36
  38
  41
  44
  47
  50
  53
  56
Earnings before tax, $m
  -42
  -51
  -60
  -71
  -83
  -95
  -108
  -123
  -138
  -154
  -170
  -188
  -206
  -225
  -245
  -266
  -287
  -310
  -333
  -357
  -382
  -408
  -436
  -464
  -493
  -524
  -556
  -589
  -624
  -660
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
  -42
  -51
  -60
  -71
  -83
  -95
  -108
  -123
  -138
  -154
  -170
  -188
  -206
  -225
  -245
  -266
  -287
  -310
  -333
  -357
  -382
  -408
  -436
  -464
  -493
  -524
  -556
  -589
  -624
  -660

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
  165
  197
  233
  272
  315
  360
  410
  462
  517
  575
  637
  701
  768
  838
  911
  987
  1,066
  1,148
  1,233
  1,322
  1,414
  1,510
  1,609
  1,713
  1,821
  1,933
  2,050
  2,172
  2,299
  2,431
Adjusted assets (=assets-cash), $m
  165
  197
  233
  272
  315
  360
  410
  462
  517
  575
  637
  701
  768
  838
  911
  987
  1,066
  1,148
  1,233
  1,322
  1,414
  1,510
  1,609
  1,713
  1,821
  1,933
  2,050
  2,172
  2,299
  2,431
Revenue / Adjusted assets
  0.655
  0.655
  0.652
  0.654
  0.654
  0.656
  0.654
  0.654
  0.654
  0.654
  0.653
  0.653
  0.654
  0.654
  0.654
  0.653
  0.654
  0.654
  0.655
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
Average production assets, $m
  116
  139
  165
  192
  222
  255
  289
  326
  365
  406
  450
  495
  542
  592
  643
  697
  753
  811
  871
  934
  999
  1,066
  1,137
  1,210
  1,286
  1,365
  1,448
  1,534
  1,623
  1,717
Working capital, $m
  -7
  -9
  -10
  -12
  -14
  -16
  -18
  -20
  -23
  -25
  -28
  -31
  -34
  -37
  -40
  -43
  -47
  -50
  -54
  -58
  -62
  -66
  -71
  -75
  -80
  -85
  -90
  -95
  -101
  -107
Total debt, $m
  15
  22
  31
  40
  50
  61
  73
  85
  99
  113
  127
  143
  159
  175
  193
  211
  230
  249
  270
  291
  313
  336
  360
  384
  410
  437
  465
  494
  524
  556
Total liabilities, $m
  39
  47
  56
  65
  75
  86
  98
  110
  124
  138
  152
  167
  184
  200
  218
  236
  255
  274
  295
  316
  338
  361
  385
  409
  435
  462
  490
  519
  549
  581
Total equity, $m
  126
  150
  177
  207
  239
  274
  312
  351
  393
  438
  484
  533
  584
  638
  693
  751
  811
  874
  938
  1,006
  1,076
  1,149
  1,225
  1,304
  1,386
  1,471
  1,560
  1,653
  1,749
  1,850
Total liabilities and equity, $m
  165
  197
  233
  272
  314
  360
  410
  461
  517
  576
  636
  700
  768
  838
  911
  987
  1,066
  1,148
  1,233
  1,322
  1,414
  1,510
  1,610
  1,713
  1,821
  1,933
  2,050
  2,172
  2,298
  2,431
Debt-to-equity ratio
  0.120
  0.150
  0.170
  0.190
  0.210
  0.220
  0.230
  0.240
  0.250
  0.260
  0.260
  0.270
  0.270
  0.280
  0.280
  0.280
  0.280
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
Adjusted equity ratio
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -42
  -51
  -60
  -71
  -83
  -95
  -108
  -123
  -138
  -154
  -170
  -188
  -206
  -225
  -245
  -266
  -287
  -310
  -333
  -357
  -382
  -408
  -436
  -464
  -493
  -524
  -556
  -589
  -624
  -660
Depreciation, amort., depletion, $m
  5
  7
  8
  9
  10
  12
  13
  15
  17
  19
  20
  22
  25
  27
  29
  32
  34
  37
  39
  42
  45
  48
  51
  55
  58
  62
  66
  69
  73
  78
Funds from operations, $m
  -37
  -44
  -53
  -62
  -72
  -83
  -95
  -108
  -121
  -135
  -150
  -165
  -181
  -198
  -216
  -234
  -253
  -273
  -294
  -315
  -337
  -360
  -384
  -409
  -435
  -462
  -490
  -520
  -550
  -582
Change in working capital, $m
  -1
  -1
  -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
  -5
  -6
  -6
Cash from operations, $m
  -35
  -43
  -51
  -60
  -71
  -81
  -93
  -105
  -119
  -133
  -147
  -162
  -178
  -195
  -213
  -231
  -250
  -269
  -290
  -311
  -333
  -356
  -380
  -405
  -430
  -457
  -485
  -514
  -545
  -576
Maintenance CAPEX, $m
  -4
  -5
  -6
  -7
  -9
  -10
  -12
  -13
  -15
  -17
  -18
  -20
  -22
  -25
  -27
  -29
  -32
  -34
  -37
  -39
  -42
  -45
  -48
  -51
  -55
  -58
  -62
  -66
  -69
  -73
New CAPEX, $m
  -20
  -23
  -25
  -28
  -30
  -32
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -52
  -54
  -56
  -58
  -60
  -63
  -65
  -68
  -70
  -73
  -76
  -79
  -83
  -86
  -90
  -94
Cash from investing activities, $m
  -24
  -28
  -31
  -35
  -39
  -42
  -47
  -50
  -54
  -58
  -61
  -65
  -69
  -74
  -79
  -83
  -88
  -92
  -97
  -102
  -107
  -113
  -118
  -124
  -131
  -137
  -145
  -152
  -159
  -167
Free cash flow, $m
  -60
  -71
  -83
  -96
  -109
  -124
  -139
  -155
  -172
  -190
  -209
  -228
  -248
  -269
  -291
  -314
  -337
  -361
  -387
  -413
  -440
  -469
  -498
  -529
  -561
  -595
  -630
  -666
  -704
  -743
Issuance/(repayment) of debt, $m
  7
  8
  9
  9
  10
  11
  12
  12
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
Issuance/(repurchase) of shares, $m
  64
  75
  88
  101
  115
  130
  146
  162
  180
  198
  217
  237
  257
  278
  301
  324
  347
  372
  398
  425
  452
  481
  511
  543
  575
  609
  645
  682
  720
  761
Cash from financing (excl. dividends), $m  
  71
  83
  97
  110
  125
  141
  158
  174
  193
  212
  232
  252
  273
  295
  318
  342
  366
  392
  418
  446
  474
  504
  535
  568
  601
  636
  673
  711
  750
  793
Total cash flow (excl. dividends), $m
  11
  12
  13
  15
  16
  17
  18
  19
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
Retained Cash Flow (-), $m
  -64
  -75
  -88
  -101
  -115
  -130
  -146
  -162
  -180
  -198
  -217
  -237
  -257
  -278
  -301
  -324
  -347
  -372
  -398
  -425
  -452
  -481
  -511
  -543
  -575
  -609
  -645
  -682
  -720
  -761
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
  -53
  -63
  -74
  -86
  -99
  -113
  -127
  -143
  -159
  -176
  -194
  -213
  -232
  -253
  -274
  -295
  -318
  -342
  -366
  -392
  -418
  -446
  -475
  -504
  -536
  -568
  -602
  -637
  -673
  -712
Discount rate, %
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
  -50
  -56
  -62
  -67
  -71
  -74
  -76
  -77
  -77
  -76
  -73
  -70
  -65
  -60
  -55
  -49
  -43
  -37
  -32
  -27
  -22
  -17
  -14
  -11
  -8
  -6
  -4
  -3
  -2
  -1
Current shareholders' claim on cash, %
  58.1
  34.1
  20.3
  12.2
  7.4
  4.5
  2.8
  1.7
  1.1
  0.7
  0.4
  0.3
  0.2
  0.1
  0.1
  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

JMU Limited, formerly Wowo Limited, operates a business-to-business (B2B) online e-commerce platform that provides integrated services to suppliers and customers in the catering industry. The Company promotes the use of its platform for small- and medium-sized restaurants and restaurant chains in China. It provides one-stop procurement services, as well as other value-added services. It offers a selection of products through its Website, www.ccjoin.com, and its mobile applications. As of December 31, 2015, the Company’s offerings (including both online direct sales and online marketplace offerings) were organized into 10 product categories on its Website, including food ingredients; seasonings; alcoholic and non-alcoholic drinks; hotel appliances; tableware; kitchen appliances; office appliances; furniture; hotel and restaurant information systems, and hotel and restaurant decoration. Its customers include restaurants, restaurant chains, hotels, food product manufacturers and others.

FINANCIAL RATIOS  of  JMU Limited (JMU)

Valuation Ratios
P/E Ratio -63.8
Price to Sales 21.8
Price to Book 6.4
Price to Tangible Book
Price to Cash Flow -265.7
Price to Free Cash Flow -199.3
Growth Rates
Sales Growth Rate 563.6%
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 -8.1%
Ret/ On Assets - 3 Yr. Avg. -88.2%
Return On Total Capital -9%
Ret/ On T. Cap. - 3 Yr. Avg. -18.7%
Return On Equity -9%
Return On Equity - 3 Yr. Avg. -18.9%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. -6.1%
EBITDA Margin -26%
EBITDA Margin - 3 Yr. Avg. -314.7%
Operating Margin -38.4%
Oper. Margin - 3 Yr. Avg. -334%
Pre-Tax Margin -38.4%
Pre-Tax Margin - 3 Yr. Avg. -334%
Net Profit Margin -34.2%
Net Profit Margin - 3 Yr. Avg. -296.3%
Effective Tax Rate 10.7%
Eff/ Tax Rate - 3 Yr. Avg. 3.9%
Payout Ratio 0%

JMU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JMU stock intrinsic value calculation we used $89 million for the last fiscal year's total revenue generated by JMU Limited. The default revenue input number comes from 0001 income statement of JMU Limited. 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 JMU stock valuation model: a) initial revenue growth rate of 21.2% 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 5.7%, whose default value for JMU is calculated based on our internal credit rating of JMU Limited, 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 JMU Limited.
    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 JMU stock the variable cost ratio is equal to 138.2%.

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 JMU 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 10.7% for JMU Limited.

Corporate tax rate of 27% is the nominal tax rate for JMU Limited. 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 JMU 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 JMU are equal to 108%.

Life of production assets of 22.1 years is the average useful life of capital assets used in JMU Limited 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 JMU is equal to -6.7%. 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 - $103.549859 million for JMU Limited - 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 81.964 million for JMU Limited 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 JMU Limited at the current share price and the inputted number of shares is $0.1 billion.

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