Intrinsic value of Nam Tai Property - NTP

Previous Close

$12.60

  Intrinsic Value

$2.41

stock screener

  Rating & Target

str. sell

-81%

Previous close

$12.60

 
Intrinsic value

$2.41

 
Up/down potential

-81%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of NTP 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 2016), $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
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  0.00
  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
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  9
  10
Variable operating expenses, $m
 
  16
  17
  17
  18
  18
  19
  19
  20
  21
  22
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
  34
  36
  38
  40
  41
  43
  46
  48
  50
  52
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
  16
  17
  17
  18
  18
  19
  19
  20
  21
  22
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
  34
  36
  38
  40
  41
  43
  46
  48
  50
  52
Operating income, $m
  -7
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -43
EBITDA, $m
  -5
  -13
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
Earnings before tax, $m
  -10
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -40
  -42
  -44
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
  0
Net income, $m
  -10
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -40
  -42
  -44

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  184
  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
  249
  67
  68
  70
  72
  74
  76
  79
  82
  85
  88
  92
  95
  99
  103
  108
  113
  118
  123
  128
  134
  141
  147
  154
  161
  169
  177
  186
  195
  204
  214
Adjusted assets (=assets-cash), $m
  65
  67
  68
  70
  72
  74
  76
  79
  82
  85
  88
  92
  95
  99
  103
  108
  113
  118
  123
  128
  134
  141
  147
  154
  161
  169
  177
  186
  195
  204
  214
Revenue / Adjusted assets
  0.046
  0.045
  0.044
  0.043
  0.042
  0.041
  0.053
  0.051
  0.049
  0.047
  0.045
  0.043
  0.042
  0.051
  0.049
  0.046
  0.044
  0.042
  0.049
  0.047
  0.045
  0.043
  0.048
  0.045
  0.043
  0.047
  0.045
  0.048
  0.046
  0.044
  0.047
Average production assets, $m
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
Working capital, $m
  195
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
Total debt, $m
  0
  0
  1
  1
  1
  2
  2
  3
  3
  4
  5
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  18
  19
  21
  22
  24
  26
  28
  30
Total liabilities, $m
  12
  13
  14
  14
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  34
  35
  37
  39
  41
  43
Total equity, $m
  236
  53
  54
  56
  57
  59
  61
  63
  65
  68
  70
  73
  76
  79
  83
  86
  90
  94
  98
  103
  107
  112
  118
  123
  129
  135
  142
  149
  156
  163
  171
Total liabilities and equity, $m
  248
  66
  68
  70
  71
  74
  76
  79
  81
  85
  88
  91
  95
  99
  104
  108
  113
  118
  123
  129
  134
  140
  147
  154
  161
  169
  177
  186
  195
  204
  214
Debt-to-equity ratio
  0.000
  0.010
  0.010
  0.020
  0.020
  0.030
  0.040
  0.040
  0.050
  0.060
  0.070
  0.070
  0.080
  0.090
  0.090
  0.100
  0.110
  0.110
  0.120
  0.120
  0.130
  0.130
  0.140
  0.140
  0.150
  0.150
  0.160
  0.160
  0.170
  0.170
  0.170
Adjusted equity ratio
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -10
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -40
  -42
  -44
Depreciation, amort., depletion, $m
  2
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Funds from operations, $m
  -7
  -13
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -37
  -38
  -40
  -42
Change in working capital, $m
  -2
  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 operations, $m
  -5
  -13
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
  -43
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
New CAPEX, $m
  -6
  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 investing activities, $m
  -44
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Free cash flow, $m
  -49
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
Issuance/(repayment) of debt, $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
Issuance/(repurchase) of shares, $m
  -3
  14
  15
  15
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
  47
  49
  52
Cash from financing (excl. dividends), $m  
  -3
  14
  15
  15
  16
  17
  17
  19
  20
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  31
  33
  34
  36
  38
  40
  43
  45
  47
  49
  51
  54
Total cash flow (excl. dividends), $m
  -60
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  9
Retained Cash Flow (-), $m
  30
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -52
Prev. year cash balance distribution, $m
 
  184
  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
 
  171
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
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
 
  164
  -12
  -12
  -12
  -11
  -11
  -10
  -10
  -10
  -9
  -8
  -8
  -7
  -7
  -6
  -6
  -5
  -4
  -4
  -3
  -3
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  0
  0
Current shareholders' claim on cash, %
  100
  87.5
  76.5
  66.9
  58.3
  50.8
  44.2
  38.4
  33.4
  28.9
  25.1
  21.7
  18.8
  16.3
  14.1
  12.1
  10.5
  9.1
  7.8
  6.7
  5.8
  5.0
  4.3
  3.7
  3.2
  2.8
  2.4
  2.0
  1.8
  1.5
  1.3

Nam Tai Property Inc. is a holding company. The Company is a property development and management company. The Company focuses on redevelopment of on two parcels of land in Gushu and Guangming, Shenzhen, China, into high-end commercial complexes. Its property development project in Guangming, Shenzhen, is named as Namtai Inno Park, and its property development project in Gushu, Shenzhen, is named as Namtai Inno City. The Company's Namtai Inno Park is a mixed development consisting of office buildings, a retail area, and apartment complexes. The Company's subsidiaries include Nam Tai Electronic & Electrical Products Limited, Nam Tai Holdings Limited (NTHL), Namtai Investment (Shenzhen) Co., Ltd. and Zastron Electronic (Shenzhen) Co., Ltd.

FINANCIAL RATIOS  of  Nam Tai Property (NTP)

Valuation Ratios
P/E Ratio -45.9
Price to Sales 153.1
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow -91.9
Price to Free Cash Flow -41.8
Growth Rates
Sales Growth Rate 0%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 200%
Cap. Spend. - 3 Yr. Gr. Rate 8.4%
Financial Strength
Quick Ratio NaN
Current Ratio 1.6
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -3.8%
Ret/ On Assets - 3 Yr. Avg. -4.6%
Return On Total Capital -4%
Ret/ On T. Cap. - 3 Yr. Avg. -5.1%
Return On Equity -4%
Return On Equity - 3 Yr. Avg. -5.4%
Asset Turnover 0
Profitability Ratios
Gross Margin 66.7%
Gross Margin - 3 Yr. Avg. 50%
EBITDA Margin -266.7%
EBITDA Margin - 3 Yr. Avg. -538.9%
Operating Margin -233.3%
Oper. Margin - 3 Yr. Avg. -772.2%
Pre-Tax Margin -333.3%
Pre-Tax Margin - 3 Yr. Avg. -688.9%
Net Profit Margin -333.3%
Net Profit Margin - 3 Yr. Avg. -688.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio -30%

NTP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NTP stock intrinsic value calculation we used $3 million for the last fiscal year's total revenue generated by Nam Tai Property. The default revenue input number comes from 2016 income statement of Nam Tai Property. 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 NTP 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 NTP is calculated based on our internal credit rating of Nam Tai Property, 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 Nam Tai Property.
    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 NTP stock the variable cost ratio is equal to 533.3%.

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 NTP 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 3.5% for Nam Tai Property.

Corporate tax rate of 27% is the nominal tax rate for Nam Tai Property. 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 NTP 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 NTP are equal to 66.7%.

Life of production assets of 1 years is the average useful life of capital assets used in Nam Tai Property 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 NTP is equal to 50%. 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 - $236 million for Nam Tai Property - 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 36.447 million for Nam Tai Property 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 Nam Tai Property at the current share price and the inputted number of shares is $0.5 billion.

RELATED COMPANIES Price Int.Val. Rating
SGOC SGOCO Group 1.02 1.23  hold

COMPANY NEWS

▶ Nam Tai posts 3Q profit   [Oct-30-17 01:59PM  Associated Press]
▶ Nam Tai Property Inc. Announces Director Departure   [Sep-22-17 04:00PM  PR Newswire]
▶ Nam Tai posts 2Q profit   [Jul-31-17 11:02PM  Associated Press]
▶ Why Shares of Nam Tai Property Inc. Are Soaring Today   [Jul-12-17 12:24PM  Motley Fool]
▶ Nam Tai posts 1Q profit   [May-02-17 06:25AM  Associated Press]
▶ Nam Tai Property Inc. PFIC Announcement   [Feb-13-17 06:00AM  PR Newswire]
▶ Nam Tai reports 4Q loss   [06:28AM  Associated Press]
▶ Is Citi Trends, Inc. (CTRN) A Good Stock To Buy?   [05:01AM  at Insider Monkey]
▶ Nam Tai Property Inc. Shares Buy Back Announcement   [Aug-22-16 06:30AM  PR Newswire]
▶ Nam Tai reports 2Q loss   [06:38AM  AP]
▶ NAM TAI PROPERTY INC. Annual General Meeting Results   [Jun-06-16 06:30AM  PR Newswire]
▶ Nam Tai Property Inc. Change of Personnel   [May-17-16 06:30AM  PR Newswire]
▶ Nam TAI PROPERTY INC. PFIC Letter to Shareholders   [Feb-01-16 07:40AM  at noodls]
▶ Nam Tai reports 4Q loss   [06:51AM  AP]
▶ PFIC Announcement   [06:30AM  PR Newswire]
▶ Hedge Funds Are Buying Oncothyreon Inc (USA) (ONTY)   [Dec-01  05:09PM  at Insider Monkey]
▶ Nam Tai reports 3Q loss   [06:15AM  AP]
▶ NAM TAI PROPERTY INC. Tender Offer Statement   [Apr-28  11:15PM  at noodls]
Financial statements of NTP
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.