Intrinsic value of Shineco - TYHT

Previous Close

$0.71

  Intrinsic Value

$0.60

stock screener

  Rating & Target

hold

-15%

Previous close

$0.71

 
Intrinsic value

$0.60

 
Up/down potential

-15%

 
Rating

hold

We calculate the intrinsic value of TYHT 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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  54
  83
  124
  180
  254
  349
  469
  616
  793
  1,001
  1,243
  1,520
  1,832
  2,180
  2,563
  2,981
  3,434
  3,921
  4,441
  4,993
  5,576
  6,191
  6,835
  7,510
  8,215
  8,951
  9,716
  10,513
  11,341
  12,202
Variable operating expenses, $m
  43
  66
  98
  142
  201
  276
  371
  487
  626
  791
  982
  1,201
  1,447
  1,722
  2,025
  2,355
  2,713
  3,098
  3,508
  3,944
  4,405
  4,891
  5,400
  5,933
  6,490
  7,071
  7,676
  8,305
  8,959
  9,639
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
  43
  66
  98
  142
  201
  276
  371
  487
  626
  791
  982
  1,201
  1,447
  1,722
  2,025
  2,355
  2,713
  3,098
  3,508
  3,944
  4,405
  4,891
  5,400
  5,933
  6,490
  7,071
  7,676
  8,305
  8,959
  9,639
Operating income, $m
  11
  17
  26
  38
  53
  73
  98
  129
  166
  210
  261
  319
  385
  458
  538
  626
  721
  823
  933
  1,049
  1,171
  1,300
  1,436
  1,577
  1,725
  1,880
  2,040
  2,208
  2,382
  2,563
EBITDA, $m
  12
  19
  28
  41
  57
  79
  106
  139
  179
  226
  281
  343
  414
  492
  579
  674
  776
  886
  1,003
  1,128
  1,260
  1,399
  1,544
  1,697
  1,856
  2,022
  2,195
  2,375
  2,562
  2,757
Interest expense (income), $m
  0
  0
  0
  0
  1
  1
  1
  2
  3
  3
  4
  5
  7
  8
  10
  12
  14
  16
  19
  22
  24
  27
  31
  34
  38
  41
  45
  49
  53
  58
  62
Earnings before tax, $m
  11
  17
  26
  37
  52
  72
  97
  127
  163
  206
  256
  312
  376
  448
  526
  612
  705
  805
  911
  1,024
  1,144
  1,269
  1,401
  1,540
  1,684
  1,835
  1,991
  2,154
  2,324
  2,500
Tax expense, $m
  3
  5
  7
  10
  14
  19
  26
  34
  44
  56
  69
  84
  102
  121
  142
  165
  190
  217
  246
  277
  309
  343
  378
  416
  455
  495
  538
  582
  627
  675
Net income, $m
  8
  12
  19
  27
  38
  52
  70
  92
  119
  150
  187
  228
  275
  327
  384
  447
  515
  587
  665
  748
  835
  927
  1,023
  1,124
  1,229
  1,339
  1,454
  1,573
  1,696
  1,825

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
  75
  116
  173
  252
  355
  488
  655
  860
  1,107
  1,398
  1,736
  2,123
  2,559
  3,044
  3,580
  4,164
  4,797
  5,476
  6,202
  6,973
  7,788
  8,646
  9,547
  10,489
  11,474
  12,501
  13,570
  14,683
  15,839
  17,042
Adjusted assets (=assets-cash), $m
  75
  116
  173
  252
  355
  488
  655
  860
  1,107
  1,398
  1,736
  2,123
  2,559
  3,044
  3,580
  4,164
  4,797
  5,476
  6,202
  6,973
  7,788
  8,646
  9,547
  10,489
  11,474
  12,501
  13,570
  14,683
  15,839
  17,042
Revenue / Adjusted assets
  0.720
  0.716
  0.717
  0.714
  0.715
  0.715
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
  0.716
Average production assets, $m
  18
  28
  41
  60
  85
  117
  157
  206
  265
  334
  415
  508
  612
  728
  856
  996
  1,147
  1,310
  1,483
  1,668
  1,862
  2,068
  2,283
  2,508
  2,744
  2,990
  3,245
  3,511
  3,788
  4,075
Working capital, $m
  27
  42
  62
  90
  127
  175
  235
  308
  396
  501
  622
  760
  916
  1,090
  1,282
  1,491
  1,717
  1,961
  2,220
  2,496
  2,788
  3,095
  3,418
  3,755
  4,108
  4,475
  4,858
  5,256
  5,671
  6,101
Total debt, $m
  5
  8
  12
  18
  25
  35
  47
  62
  80
  101
  126
  154
  186
  221
  261
  303
  349
  399
  452
  508
  568
  630
  696
  765
  837
  912
  990
  1,071
  1,155
  1,243
Total liabilities, $m
  5
  8
  13
  18
  26
  36
  48
  63
  81
  102
  127
  155
  187
  222
  261
  304
  350
  400
  453
  509
  569
  631
  697
  766
  838
  913
  991
  1,072
  1,156
  1,244
Total equity, $m
  70
  108
  161
  233
  329
  452
  607
  798
  1,026
  1,296
  1,610
  1,968
  2,372
  2,822
  3,318
  3,860
  4,446
  5,077
  5,749
  6,464
  7,220
  8,015
  8,850
  9,724
  10,637
  11,588
  12,580
  13,611
  14,683
  15,798
Total liabilities and equity, $m
  75
  116
  174
  251
  355
  488
  655
  861
  1,107
  1,398
  1,737
  2,123
  2,559
  3,044
  3,579
  4,164
  4,796
  5,477
  6,202
  6,973
  7,789
  8,646
  9,547
  10,490
  11,475
  12,501
  13,571
  14,683
  15,839
  17,042
Debt-to-equity ratio
  0.070
  0.070
  0.070
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
  0.080
Adjusted equity ratio
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927
  0.927

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  8
  12
  19
  27
  38
  52
  70
  92
  119
  150
  187
  228
  275
  327
  384
  447
  515
  587
  665
  748
  835
  927
  1,023
  1,124
  1,229
  1,339
  1,454
  1,573
  1,696
  1,825
Depreciation, amort., depletion, $m
  1
  1
  2
  3
  4
  6
  8
  10
  13
  16
  20
  24
  29
  35
  41
  47
  55
  62
  71
  79
  89
  98
  109
  119
  131
  142
  155
  167
  180
  194
Funds from operations, $m
  9
  14
  21
  30
  42
  58
  78
  102
  132
  166
  206
  252
  304
  362
  425
  494
  569
  650
  736
  827
  924
  1,025
  1,132
  1,243
  1,360
  1,482
  1,608
  1,740
  1,877
  2,019
Change in working capital, $m
  10
  15
  21
  28
  37
  48
  60
  73
  88
  104
  121
  138
  156
  174
  192
  209
  226
  243
  260
  276
  292
  307
  322
  337
  353
  368
  383
  398
  414
  430
Cash from operations, $m
  -1
  -1
  0
  2
  5
  11
  18
  29
  43
  62
  85
  114
  148
  188
  233
  285
  343
  406
  476
  551
  632
  718
  809
  906
  1,007
  1,114
  1,225
  1,342
  1,463
  1,589
Maintenance CAPEX, $m
  -1
  -1
  -1
  -2
  -3
  -4
  -6
  -7
  -10
  -13
  -16
  -20
  -24
  -29
  -35
  -41
  -47
  -55
  -62
  -71
  -79
  -89
  -98
  -109
  -119
  -131
  -142
  -155
  -167
  -180
New CAPEX, $m
  -7
  -10
  -14
  -19
  -25
  -32
  -40
  -49
  -59
  -70
  -81
  -92
  -104
  -116
  -128
  -140
  -151
  -163
  -174
  -184
  -195
  -205
  -215
  -225
  -235
  -246
  -256
  -266
  -277
  -288
Cash from investing activities, $m
  -8
  -11
  -15
  -21
  -28
  -36
  -46
  -56
  -69
  -83
  -97
  -112
  -128
  -145
  -163
  -181
  -198
  -218
  -236
  -255
  -274
  -294
  -313
  -334
  -354
  -377
  -398
  -421
  -444
  -468
Free cash flow, $m
  -8
  -11
  -15
  -19
  -22
  -25
  -27
  -28
  -25
  -20
  -11
  2
  19
  42
  71
  105
  144
  189
  240
  296
  357
  424
  496
  572
  653
  738
  827
  921
  1,019
  1,121
Issuance/(repayment) of debt, $m
  2
  3
  4
  6
  8
  10
  12
  15
  18
  21
  25
  28
  32
  35
  39
  43
  46
  50
  53
  56
  59
  63
  66
  69
  72
  75
  78
  81
  84
  88
Issuance/(repurchase) of shares, $m
  18
  25
  35
  45
  58
  71
  84
  98
  110
  120
  127
  130
  129
  123
  112
  95
  72
  43
  8
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  20
  28
  39
  51
  66
  81
  96
  113
  128
  141
  152
  158
  161
  158
  151
  138
  118
  93
  61
  56
  59
  63
  66
  69
  72
  75
  78
  81
  84
  88
Total cash flow (excl. dividends), $m
  11
  17
  24
  33
  43
  55
  69
  85
  102
  121
  140
  160
  181
  201
  222
  242
  262
  282
  301
  352
  417
  487
  561
  641
  724
  813
  905
  1,002
  1,103
  1,209
Retained Cash Flow (-), $m
  -26
  -38
  -53
  -73
  -96
  -123
  -155
  -190
  -229
  -270
  -313
  -358
  -404
  -450
  -496
  -542
  -586
  -630
  -673
  -715
  -755
  -795
  -835
  -874
  -913
  -952
  -991
  -1,031
  -1,072
  -1,115
Prev. year cash balance distribution, $m
  18
  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
  4
  -21
  -29
  -40
  -53
  -68
  -86
  -105
  -126
  -149
  -173
  -198
  -224
  -249
  -274
  -300
  -324
  -349
  -372
  -362
  -338
  -309
  -274
  -233
  -188
  -139
  -86
  -29
  31
  94
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
  4
  -19
  -26
  -33
  -41
  -49
  -58
  -66
  -73
  -78
  -82
  -85
  -85
  -84
  -81
  -76
  -71
  -64
  -57
  -46
  -35
  -26
  -18
  -12
  -7
  -4
  -2
  0
  0
  1
Current shareholders' claim on cash, %
  63.8
  41.9
  28.7
  20.4
  15.1
  11.5
  9.1
  7.4
  6.2
  5.3
  4.7
  4.2
  3.8
  3.6
  3.4
  3.2
  3.1
  3.1
  3.1
  3.1
  3.1
  3.1
  3.1
  3.1
  3.1
  3.1
  3.1
  3.1
  3.1
  3.1

Shineco, Inc. is a holding company. The Company provides health and well-being focused plant-based products by using its subsidiaries' and variable interest entities' vertically- and horizontally-integrated production, distribution and sales channels. The Company operates through three segments: developing, manufacturing and distributing of specialized fabrics, textile products and other by-products derived from an indigenous Chinese plant called Apocynum Venetum, known as Bluish Dogbane (Luobuma); planting, processing and distributing of traditional Chinese medicinal herbal products, as well as other pharmaceutical products (Herbal products), and planting, processing and distributing of green and organic agricultural produce, as well as growing and cultivating of Chinese Yew trees (Agricultural products). It utilizes engineering technologies and biotechnologies to produce, among other products, Chinese herbal medicines, organic agricultural produce and specialized textiles.

FINANCIAL RATIOS  of  Shineco (TYHT)

Valuation Ratios
P/E Ratio 1.9
Price to Sales 0.4
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow -5
Price to Free Cash Flow -5
Growth Rates
Sales Growth Rate -2.9%
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 8
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 4.8%
Interest Coverage 0
Management Effectiveness
Return On Assets 12.8%
Ret/ On Assets - 3 Yr. Avg. 14.1%
Return On Total Capital 13.6%
Ret/ On T. Cap. - 3 Yr. Avg. 15%
Return On Equity 14.3%
Return On Equity - 3 Yr. Avg. 16%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 32.4%
Gross Margin - 3 Yr. Avg. 31.4%
EBITDA Margin 32.4%
EBITDA Margin - 3 Yr. Avg. 30.4%
Operating Margin 23.5%
Oper. Margin - 3 Yr. Avg. 21.6%
Pre-Tax Margin 29.4%
Pre-Tax Margin - 3 Yr. Avg. 27.5%
Net Profit Margin 23.5%
Net Profit Margin - 3 Yr. Avg. 22.5%
Effective Tax Rate 10%
Eff/ Tax Rate - 3 Yr. Avg. 14.4%
Payout Ratio 0%

TYHT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TYHT stock intrinsic value calculation we used $33.592337 million for the last fiscal year's total revenue generated by Shineco. The default revenue input number comes from 0001 income statement of Shineco. 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 TYHT stock valuation model: a) initial revenue growth rate of 60% 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 TYHT is calculated based on our internal credit rating of Shineco, 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 Shineco.
    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 TYHT stock the variable cost ratio is equal to 79.4%.

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 TYHT 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 Shineco.

Corporate tax rate of 27% is the nominal tax rate for Shineco. 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 TYHT 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 TYHT are equal to 33.4%.

Life of production assets of 21 years is the average useful life of capital assets used in Shineco 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 TYHT 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 - $62.166546 million for Shineco - 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 25.26 million for Shineco 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 Shineco at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ Shineco, Inc. Reports Fiscal Year 2018 Financial Results   [Oct-15-18 04:30PM  PR Newswire]
▶ SeeThruEquity Issues Update on Shineco, Inc.   [Aug-08-18 09:00AM  ACCESSWIRE]
▶ Is Shineco Inc (NASDAQ:TYHT) A Financially Sound Company?   [May-15-18 06:19PM  Simply Wall St.]
▶ What You Must Know About Shineco Incs (NASDAQ:TYHT) 12.91% ROE   [Mar-01-18 05:55PM  Simply Wall St.]
▶ Does Shineco Incs (NASDAQ:TYHT) PE Ratio Warrant A Buy?   [Jan-09-18 08:13AM  Simply Wall St.]
▶ How Financially Strong Is Shineco Inc (NASDAQ:TYHT)?   [Jan-01-18 06:25PM  Simply Wall St.]
▶ Does Shineco Incs (TYHT) PE Ratio Signal A Buying Opportunity?   [Sep-11-17 05:03PM  Simply Wall St.]
▶ Shineco, Inc. Announces New Corporate Website Launch   [May-30-17 08:00AM  PR Newswire]
▶ Shineco, Inc. Retains Ascent Investor Relations LLC   [May-11-17 08:00AM  PR Newswire]

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