Intrinsic value of Dorian LPG Ltd. - LPG

Previous Close

$8.30

  Intrinsic Value

$4.35

stock screener

  Rating & Target

sell

-48%

Previous close

$8.30

 
Intrinsic value

$4.35

 
Up/down potential

-48%

 
Rating

sell

We calculate the intrinsic value of LPG 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 0.5

 

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, %
  23.70
  21.83
  20.15
  18.63
  17.27
  16.04
  14.94
  13.94
  13.05
  12.24
  11.52
  10.87
  10.28
  9.75
  9.28
  8.85
  8.47
  8.12
  7.81
  7.53
  7.27
  7.05
  6.84
  6.66
  6.49
  6.34
  6.21
  6.09
  5.98
  5.88
Revenue, $m
  197
  240
  288
  342
  401
  465
  534
  609
  688
  772
  861
  955
  1,053
  1,156
  1,263
  1,375
  1,491
  1,612
  1,738
  1,869
  2,005
  2,146
  2,293
  2,446
  2,605
  2,770
  2,942
  3,121
  3,307
  3,502
Variable operating expenses, $m
  183
  223
  268
  318
  373
  433
  497
  567
  641
  719
  802
  889
  980
  1,076
  1,176
  1,280
  1,388
  1,501
  1,618
  1,740
  1,867
  1,998
  2,135
  2,277
  2,425
  2,579
  2,739
  2,905
  3,079
  3,260
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
  183
  223
  268
  318
  373
  433
  497
  567
  641
  719
  802
  889
  980
  1,076
  1,176
  1,280
  1,388
  1,501
  1,618
  1,740
  1,867
  1,998
  2,135
  2,277
  2,425
  2,579
  2,739
  2,905
  3,079
  3,260
Operating income, $m
  14
  17
  20
  24
  28
  32
  37
  42
  47
  53
  59
  66
  73
  80
  87
  95
  103
  111
  120
  129
  138
  148
  158
  169
  180
  191
  203
  215
  228
  242
EBITDA, $m
  94
  115
  138
  164
  192
  223
  256
  292
  330
  370
  413
  458
  505
  554
  605
  659
  715
  773
  833
  896
  961
  1,028
  1,099
  1,172
  1,248
  1,327
  1,409
  1,495
  1,585
  1,678
Interest expense (income), $m
  25
  41
  50
  61
  72
  85
  100
  115
  132
  150
  169
  190
  211
  234
  258
  283
  309
  336
  364
  393
  424
  456
  489
  523
  558
  596
  634
  674
  716
  759
  804
Earnings before tax, $m
  -27
  -34
  -41
  -49
  -58
  -68
  -78
  -90
  -103
  -116
  -130
  -145
  -161
  -178
  -196
  -214
  -233
  -253
  -274
  -295
  -317
  -341
  -365
  -390
  -416
  -443
  -471
  -500
  -531
  -563
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
  -27
  -34
  -41
  -49
  -58
  -68
  -78
  -90
  -103
  -116
  -130
  -145
  -161
  -178
  -196
  -214
  -233
  -253
  -274
  -295
  -317
  -341
  -365
  -390
  -416
  -443
  -471
  -500
  -531
  -563

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
  2,049
  2,496
  2,999
  3,558
  4,172
  4,841
  5,565
  6,340
  7,168
  8,046
  8,972
  9,948
  10,970
  12,040
  13,157
  14,322
  15,534
  16,795
  18,107
  19,469
  20,885
  22,357
  23,887
  25,477
  27,131
  28,851
  30,642
  32,508
  34,451
  36,477
Adjusted assets (=assets-cash), $m
  2,049
  2,496
  2,999
  3,558
  4,172
  4,841
  5,565
  6,340
  7,168
  8,046
  8,972
  9,948
  10,970
  12,040
  13,157
  14,322
  15,534
  16,795
  18,107
  19,469
  20,885
  22,357
  23,887
  25,477
  27,131
  28,851
  30,642
  32,508
  34,451
  36,477
Revenue / Adjusted assets
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
  0.096
Average production assets, $m
  1,944
  2,368
  2,846
  3,376
  3,959
  4,594
  5,280
  6,016
  6,801
  7,634
  8,514
  9,439
  10,409
  11,425
  12,485
  13,589
  14,740
  15,937
  17,181
  18,474
  19,817
  21,214
  22,665
  24,174
  25,743
  27,376
  29,076
  30,846
  32,690
  34,612
Working capital, $m
  18
  22
  27
  32
  37
  43
  50
  57
  64
  72
  80
  89
  98
  107
  117
  128
  139
  150
  162
  174
  186
  200
  213
  227
  242
  258
  274
  290
  308
  326
Total debt, $m
  930
  1,123
  1,340
  1,581
  1,846
  2,134
  2,446
  2,780
  3,137
  3,515
  3,915
  4,335
  4,776
  5,237
  5,718
  6,220
  6,743
  7,286
  7,851
  8,439
  9,049
  9,683
  10,343
  11,028
  11,741
  12,482
  13,254
  14,058
  14,896
  15,769
Total liabilities, $m
  883
  1,076
  1,293
  1,533
  1,798
  2,087
  2,398
  2,733
  3,089
  3,468
  3,867
  4,287
  4,728
  5,189
  5,671
  6,173
  6,695
  7,239
  7,804
  8,391
  9,002
  9,636
  10,295
  10,980
  11,693
  12,435
  13,207
  14,011
  14,849
  15,722
Total equity, $m
  1,166
  1,420
  1,706
  2,024
  2,374
  2,755
  3,166
  3,608
  4,079
  4,578
  5,105
  5,660
  6,242
  6,851
  7,487
  8,149
  8,839
  9,557
  10,303
  11,078
  11,884
  12,721
  13,591
  14,496
  15,437
  16,416
  17,436
  18,497
  19,603
  20,756
Total liabilities and equity, $m
  2,049
  2,496
  2,999
  3,557
  4,172
  4,842
  5,564
  6,341
  7,168
  8,046
  8,972
  9,947
  10,970
  12,040
  13,158
  14,322
  15,534
  16,796
  18,107
  19,469
  20,886
  22,357
  23,886
  25,476
  27,130
  28,851
  30,643
  32,508
  34,452
  36,478
Debt-to-equity ratio
  0.800
  0.790
  0.790
  0.780
  0.780
  0.770
  0.770
  0.770
  0.770
  0.770
  0.770
  0.770
  0.770
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
  0.760
Adjusted equity ratio
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -27
  -34
  -41
  -49
  -58
  -68
  -78
  -90
  -103
  -116
  -130
  -145
  -161
  -178
  -196
  -214
  -233
  -253
  -274
  -295
  -317
  -341
  -365
  -390
  -416
  -443
  -471
  -500
  -531
  -563
Depreciation, amort., depletion, $m
  81
  98
  118
  140
  164
  191
  219
  250
  282
  317
  353
  392
  432
  474
  518
  564
  612
  661
  713
  767
  822
  880
  940
  1,003
  1,068
  1,136
  1,206
  1,280
  1,356
  1,436
Funds from operations, $m
  53
  65
  77
  91
  107
  123
  141
  160
  180
  201
  223
  246
  271
  296
  322
  350
  379
  408
  439
  472
  505
  540
  576
  613
  652
  693
  735
  779
  825
  873
Change in working capital, $m
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
Cash from operations, $m
  50
  61
  73
  86
  101
  117
  134
  153
  172
  193
  215
  237
  261
  286
  312
  340
  368
  397
  428
  459
  492
  527
  562
  599
  638
  678
  719
  763
  808
  855
Maintenance CAPEX, $m
  -65
  -81
  -98
  -118
  -140
  -164
  -191
  -219
  -250
  -282
  -317
  -353
  -392
  -432
  -474
  -518
  -564
  -612
  -661
  -713
  -767
  -822
  -880
  -940
  -1,003
  -1,068
  -1,136
  -1,206
  -1,280
  -1,356
New CAPEX, $m
  -372
  -424
  -477
  -530
  -583
  -635
  -686
  -736
  -785
  -833
  -879
  -925
  -970
  -1,015
  -1,060
  -1,105
  -1,150
  -1,197
  -1,244
  -1,293
  -1,344
  -1,396
  -1,451
  -1,509
  -1,569
  -1,633
  -1,700
  -1,770
  -1,844
  -1,922
Cash from investing activities, $m
  -437
  -505
  -575
  -648
  -723
  -799
  -877
  -955
  -1,035
  -1,115
  -1,196
  -1,278
  -1,362
  -1,447
  -1,534
  -1,623
  -1,714
  -1,809
  -1,905
  -2,006
  -2,111
  -2,218
  -2,331
  -2,449
  -2,572
  -2,701
  -2,836
  -2,976
  -3,124
  -3,278
Free cash flow, $m
  -388
  -444
  -503
  -562
  -622
  -682
  -743
  -803
  -863
  -922
  -982
  -1,041
  -1,101
  -1,161
  -1,222
  -1,283
  -1,346
  -1,411
  -1,478
  -1,547
  -1,618
  -1,692
  -1,769
  -1,850
  -1,935
  -2,023
  -2,116
  -2,214
  -2,316
  -2,423
Issuance/(repayment) of debt, $m
  171
  193
  217
  241
  265
  288
  312
  334
  357
  378
  399
  420
  441
  461
  481
  502
  523
  544
  565
  587
  610
  634
  659
  685
  713
  742
  772
  804
  838
  873
Issuance/(repurchase) of shares, $m
  255
  288
  327
  367
  407
  448
  490
  532
  573
  615
  658
  700
  743
  787
  831
  876
  923
  970
  1,020
  1,070
  1,123
  1,178
  1,235
  1,295
  1,357
  1,422
  1,490
  1,562
  1,637
  1,716
Cash from financing (excl. dividends), $m  
  426
  481
  544
  608
  672
  736
  802
  866
  930
  993
  1,057
  1,120
  1,184
  1,248
  1,312
  1,378
  1,446
  1,514
  1,585
  1,657
  1,733
  1,812
  1,894
  1,980
  2,070
  2,164
  2,262
  2,366
  2,475
  2,589
Total cash flow (excl. dividends), $m
  39
  36
  41
  46
  50
  55
  59
  63
  68
  72
  76
  80
  83
  87
  91
  95
  99
  103
  107
  111
  116
  120
  125
  130
  135
  140
  146
  152
  159
  165
Retained Cash Flow (-), $m
  -255
  -288
  -327
  -367
  -407
  -448
  -490
  -532
  -573
  -615
  -658
  -700
  -743
  -787
  -831
  -876
  -923
  -970
  -1,020
  -1,070
  -1,123
  -1,178
  -1,235
  -1,295
  -1,357
  -1,422
  -1,490
  -1,562
  -1,637
  -1,716
Prev. year cash balance distribution, $m
  21
  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
  -195
  -252
  -286
  -321
  -357
  -394
  -431
  -468
  -506
  -544
  -582
  -621
  -660
  -700
  -740
  -781
  -824
  -868
  -913
  -959
  -1,008
  -1,058
  -1,110
  -1,165
  -1,222
  -1,282
  -1,344
  -1,410
  -1,478
  -1,550
Discount rate, %
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
PV of cash for distribution, $m
  -181
  -216
  -225
  -229
  -230
  -226
  -219
  -208
  -194
  -178
  -161
  -143
  -125
  -107
  -90
  -75
  -61
  -48
  -38
  -29
  -21
  -15
  -11
  -8
  -5
  -3
  -2
  -1
  -1
  0
Current shareholders' claim on cash, %
  72.0
  53.2
  40.0
  30.6
  23.8
  18.7
  14.9
  12.1
  9.8
  8.1
  6.7
  5.6
  4.7
  4.0
  3.4
  2.9
  2.5
  2.2
  1.9
  1.6
  1.4
  1.3
  1.1
  1.0
  0.9
  0.8
  0.7
  0.6
  0.5
  0.5

Dorian LPG Ltd. is a holding company. The Company, through its subsidiaries, is focused on owning and operating very large gas carrier (VLGCs) in the liquefied petroleum gas (LPG) shipping industry. The Company is engaged in the transportation of LPG across the world through its ownership and operation of LPG tankers. As of March 31, 2016, the Company owned and operated a fleet of 22 VLGCs, including 19 84,000 cubic meter (cbm) ECO-design VLGCs (ECO VLGCs) and three 82,000 cbm VLGCs. The VLGCs in its fleet had an aggregate carrying capacity of approximately 1.8 million cbm at May 26, 2016. It provides in-house commercial and technical management services for all of its vessels. As of May 26, 2016, its VLGCs included Captain Nicholas ML; Captain John NP; Comet; Corsair; Corvette; Cougar; Concorde; Cobra; Continental; Commodore; Constellation; Cheyenne; Cratis; Chaparral; Commander, and Challenger. The Company's customers include global energy companies, commodity traders and importers.

FINANCIAL RATIOS  of  Dorian LPG Ltd. (LPG)

Valuation Ratios
P/E Ratio -456.3
Price to Sales 2.7
Price to Book 0.5
Price to Tangible Book
Price to Cash Flow 8.8
Price to Free Cash Flow 9.1
Growth Rates
Sales Growth Rate -42.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -99.8%
Cap. Spend. - 3 Yr. Gr. Rate -59%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 70.1%
Total Debt to Equity 76.8%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.3%
Ret/ On Assets - 3 Yr. Avg. 4.5%
Return On Total Capital -0.1%
Ret/ On T. Cap. - 3 Yr. Avg. 3.9%
Return On Equity -0.1%
Return On Equity - 3 Yr. Avg. 5.7%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 98.2%
Gross Margin - 3 Yr. Avg. 91%
EBITDA Margin 53.3%
EBITDA Margin - 3 Yr. Avg. 52.1%
Operating Margin 8.4%
Oper. Margin - 3 Yr. Avg. 30.6%
Pre-Tax Margin -0.6%
Pre-Tax Margin - 3 Yr. Avg. 22.8%
Net Profit Margin -0.6%
Net Profit Margin - 3 Yr. Avg. 22.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

LPG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LPG stock intrinsic value calculation we used $159 million for the last fiscal year's total revenue generated by Dorian LPG Ltd.. The default revenue input number comes from 0001 income statement of Dorian LPG Ltd.. 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 LPG stock valuation model: a) initial revenue growth rate of 23.7% 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 7.6%, whose default value for LPG is calculated based on our internal credit rating of Dorian LPG Ltd., 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 Dorian LPG Ltd..
    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 LPG stock the variable cost ratio is equal to 93.1%.

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 LPG 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 Dorian LPG Ltd..

Corporate tax rate of 27% is the nominal tax rate for Dorian LPG Ltd.. 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 LPG 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 LPG are equal to 988.4%.

Life of production assets of 24.1 years is the average useful life of capital assets used in Dorian LPG Ltd. 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 LPG is equal to 9.3%. 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 - $959.413362 million for Dorian LPG Ltd. - 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 55.177 million for Dorian LPG Ltd. 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 Dorian LPG Ltd. at the current share price and the inputted number of shares is $0.5 billion.

RELATED COMPANIES Price Int.Val. Rating
GASS StealthGas, In 3.28 3.60  hold
NVGS Navigator Hold 9.32 4.33  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.