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2021-12-23

If you have 1k, would you invest in GRAB or SE? Which will have better capital Efficiencies?

An Intrinsic Calculation For Sea Limited (NYSE:SE) Suggests It's 38% Undervalued<blockquote>Sea Limited (NYSE:SE) 的内部计算表明其估值被低估了 38%</blockquote>

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Which will have better capital Efficiencies?","highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/691799321","repostId":1151093531,"repostType":4,"repost":{"id":"1151093531","kind":"news","pubTimestamp":1640229464,"share":"https://www.laohunote.com/m/news/1151093531?lang=zh_CN&edition=full","pubTime":"2021-12-23 11:17","market":"us","language":"en","title":"An Intrinsic Calculation For Sea Limited (NYSE:SE) Suggests It's 38% Undervalued<blockquote>Sea Limited (NYSE:SE) 的内部计算表明其估值被低估了 38%</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1151093531","media":"Nasdaq","summary":"Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Sea","content":"Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Sea Limited (NYSE:SE) as an investment opportunity by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.<blockquote>今天，我们将简单介绍一种估值方法，该方法用于通过预测 Sea Limited (NYSE:SE) 的未来现金流，然后将其贴现到今天的价值来评估其作为投资机会的吸引力。我们的分析将采用贴现现金流（DCF）模型。在你认为你无法理解它之前，继续读下去吧!它实际上比你想象的要简单得多。</blockquote> Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. For those who are keen learners of equity analysis, theSimply Wall St analysis model heremay be something of interest to you.<blockquote>公司可以通过多种方式进行估值，因此我们要指出，DCF 并不适合所有情况。对于那些热衷于股票分析的人来说，这里的简单华尔街分析模型可能会让你感兴趣。</blockquote> The method<blockquote>方法</blockquote> We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.<blockquote>我们使用两阶段增长模型，这仅仅意味着我们考虑了公司增长的两个阶段。在初始阶段，公司可能有较高的增长率，而第二阶段通常被假设有稳定的增长率。首先，我们需要估算未来十年的现金流。在可能的情况下，我们使用分析师估计，但当这些估计不可用时，我们会根据上次估计或报告值推断之前的自由现金流 (FCF)。我们假设自由现金流萎缩的公司将放缓萎缩速度，而自由现金流增长的公司在此期间增长率将放缓。我们这样做是为了反映早年的增长往往比晚年放缓得多。</blockquote> A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:<img src=\"https://static.tigerbbs.com/900a00b739c53cb9c592a1ff4cb5eaff\" tg-width=\"614\" tg-height=\"239\" width=\"100%\" height=\"auto\">(\"Est\" = FCF growth rate estimated by Simply Wall St)<blockquote>DCF 就是未来一美元的价值低于今天一美元的想法，因此我们将这些未来现金流的价值贴现为以今天美元计算的估计值：（「Est」=简单华尔街估计的自由现金流增长率）</blockquote> Present Value of 10-year Cash Flow (PVCF)= US$46b<blockquote>10年现金流量现值（PVCF）= 460亿美元</blockquote> After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.0%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 6.3%.<blockquote>计算完初始10年期间未来现金流量的现值后，我们需要计算终端值，终端值占了第一阶段以外的所有未来现金流量。由于许多原因，使用的增长率是非常保守的，不能超过一个国家的国内生产总值增长率。在这种情况下，我们使用10年期政府债券收益率的5年平均值（2.0%）来估计未来的增长。与 10 年“成长期”相同，我们使用 6.3% 的股权成本将未来现金流贴现到今天的价值。</blockquote> Terminal Value (TV)= FCF2031× (1 + g) ÷ (r – g) = US$13b× (1 + 2.0%) ÷ (6.3%– 2.0%) = US$293b<blockquote>终端值（TV）= FCF2031× (1 + g) ÷ (r – g) = 130亿美元× (1 + 2.0%) ÷ (6.3% – 2.0%) = 2930亿美元</blockquote> Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$293b÷ ( 1 + 6.3%)10= US$159b<blockquote>终端价值现值（PVTV）= 电视 / (1 + r)10= 2930亿美元÷ (1 + 6.3%)10= 1590亿美元</blockquote> The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$204b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of US$228, the company appears quite good value at a 38% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.<blockquote>总价值是未来十年的现金流量加上折现终值的总和，得出总股本价值，在本例中为204b美元。为了得到每股内在价值，我们将其除以已发行股票总数。与目前 228 美元的股价相比，该公司的价值似乎相当不错，比目前的股价折扣了 38%。但请记住，这只是一个近似的估值，就像任何复杂的公式一样——垃圾进去，垃圾出去。</blockquote> <img src=\"https://static.tigerbbs.com/d031f94f7285b2dd74b50be13b78ca2d\" tg-width=\"853\" tg-height=\"380\" width=\"100%\" height=\"auto\">The assumptions<blockquote>假设</blockquote> The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Sea as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.3%, which is based on a levered beta of 1.000. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.<blockquote>上面的计算非常依赖于两个假设。第一个是贴现率，第二个是现金流。你不必同意这些输入，我建议你自己重新计算并玩它们。DCF也没有考虑行业可能的周期性，或公司未来的资本需求，因此它不能全面反映公司的潜在业绩。鉴于我们将 Sea 视为潜在股东，因此股权成本被用作贴现率，而不是考虑债务的资本成本（或加权平均资本成本，WACC）。在这个计算中，我们使用了6.3%，这是基于1.000的杠杆贝塔。贝塔值是衡量股票与整个市场相比波动性的指标。我们的贝塔值来自全球可比公司的行业平均贝塔值，限制在0.8到2.0之间，对于稳定的业务来说，这是一个合理的范围。</blockquote> Looking Ahead:<blockquote>展望未来：</blockquote> Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Can we work out why the company is trading at a discount to intrinsic value? For Sea, we've compiled three further items you should assess:<blockquote>虽然很重要，但DCF计算不应该是你在研究一家公司时唯一考虑的指标。DCF模型并不是一个完美的股票估值工具。最好应用不同的案例和假设，看看它们将如何影响公司的估值。如果一家公司以不同的速度增长，或者如果其股权成本或无风险利率发生巨大变化，产出可能会非常不同。我们能弄清楚为什么该公司的交易价格低于内在价值吗？对于 Sea，我们还编制了您应该评估的另外三个项目：</blockquote> <ol> <li>Risks: To that end, you should be aware of the2 warning signs&nbsp;we've spotted with Sea.</li> <li>Future Earnings: How does SE's growth rate compare to its peers and the wider market?</li> <li>Other High Quality Alternatives: Do you like a good all-rounder?</li> </ol><blockquote><ol><li>风险：为此，您应该意识到2个警告标志我们发现了海。</li><li>未来盈利: SE 的增长率与同行和更广泛的市场相比如何？</li><li>其他高质量替代品你喜欢一个好的全能选手吗？</li></ol></blockquote>","source":"lsy1603171495471","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>An Intrinsic Calculation For Sea Limited (NYSE:SE) Suggests It's 38% Undervalued<blockquote>Sea Limited (NYSE:SE) 的内部计算表明其估值被低估了 38%</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAn Intrinsic Calculation For Sea Limited (NYSE:SE) Suggests It's 38% Undervalued<blockquote>Sea Limited (NYSE:SE) 的内部计算表明其估值被低估了 38%</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nNasdaq2021-12-23 11:17\n\n</h4>\n</header>\n<article>\nToday we'll do a simple run through of a valuation method used to estimate the attractiveness of Sea Limited (NYSE:SE) as an investment opportunity by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.<blockquote>今天，我们将简单介绍一种估值方法，该方法用于通过预测 Sea Limited (NYSE:SE) 的未来现金流，然后将其贴现到今天的价值来评估其作为投资机会的吸引力。我们的分析将采用贴现现金流（DCF）模型。在你认为你无法理解它之前，继续读下去吧!它实际上比你想象的要简单得多。</blockquote> Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. For those who are keen learners of equity analysis, theSimply Wall St analysis model heremay be something of interest to you.<blockquote>公司可以通过多种方式进行估值，因此我们要指出，DCF 并不适合所有情况。对于那些热衷于股票分析的人来说，这里的简单华尔街分析模型可能会让你感兴趣。</blockquote> The method<blockquote>方法</blockquote> We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.<blockquote>我们使用两阶段增长模型，这仅仅意味着我们考虑了公司增长的两个阶段。在初始阶段，公司可能有较高的增长率，而第二阶段通常被假设有稳定的增长率。首先，我们需要估算未来十年的现金流。在可能的情况下，我们使用分析师估计，但当这些估计不可用时，我们会根据上次估计或报告值推断之前的自由现金流 (FCF)。我们假设自由现金流萎缩的公司将放缓萎缩速度，而自由现金流增长的公司在此期间增长率将放缓。我们这样做是为了反映早年的增长往往比晚年放缓得多。</blockquote> A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:<img src=\"https://static.tigerbbs.com/900a00b739c53cb9c592a1ff4cb5eaff\" tg-width=\"614\" tg-height=\"239\" width=\"100%\" height=\"auto\">(\"Est\" = FCF growth rate estimated by Simply Wall St)<blockquote>DCF 就是未来一美元的价值低于今天一美元的想法，因此我们将这些未来现金流的价值贴现为以今天美元计算的估计值：（「Est」=简单华尔街估计的自由现金流增长率）</blockquote> Present Value of 10-year Cash Flow (PVCF)= US$46b<blockquote>10年现金流量现值（PVCF）= 460亿美元</blockquote> After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.0%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 6.3%.<blockquote>计算完初始10年期间未来现金流量的现值后，我们需要计算终端值，终端值占了第一阶段以外的所有未来现金流量。由于许多原因，使用的增长率是非常保守的，不能超过一个国家的国内生产总值增长率。在这种情况下，我们使用10年期政府债券收益率的5年平均值（2.0%）来估计未来的增长。与 10 年“成长期”相同，我们使用 6.3% 的股权成本将未来现金流贴现到今天的价值。</blockquote> Terminal Value (TV)= FCF2031× (1 + g) ÷ (r – g) = US$13b× (1 + 2.0%) ÷ (6.3%– 2.0%) = US$293b<blockquote>终端值（TV）= FCF2031× (1 + g) ÷ (r – g) = 130亿美元× (1 + 2.0%) ÷ (6.3% – 2.0%) = 2930亿美元</blockquote> Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$293b÷ ( 1 + 6.3%)10= US$159b<blockquote>终端价值现值（PVTV）= 电视 / (1 + r)10= 2930亿美元÷ (1 + 6.3%)10= 1590亿美元</blockquote> The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$204b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of US$228, the company appears quite good value at a 38% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.<blockquote>总价值是未来十年的现金流量加上折现终值的总和，得出总股本价值，在本例中为204b美元。为了得到每股内在价值，我们将其除以已发行股票总数。与目前 228 美元的股价相比，该公司的价值似乎相当不错，比目前的股价折扣了 38%。但请记住，这只是一个近似的估值，就像任何复杂的公式一样——垃圾进去，垃圾出去。</blockquote> <img src=\"https://static.tigerbbs.com/d031f94f7285b2dd74b50be13b78ca2d\" tg-width=\"853\" tg-height=\"380\" width=\"100%\" height=\"auto\">The assumptions<blockquote>假设</blockquote> The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Sea as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.3%, which is based on a levered beta of 1.000. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.<blockquote>上面的计算非常依赖于两个假设。第一个是贴现率，第二个是现金流。你不必同意这些输入，我建议你自己重新计算并玩它们。DCF也没有考虑行业可能的周期性，或公司未来的资本需求，因此它不能全面反映公司的潜在业绩。鉴于我们将 Sea 视为潜在股东，因此股权成本被用作贴现率，而不是考虑债务的资本成本（或加权平均资本成本，WACC）。在这个计算中，我们使用了6.3%，这是基于1.000的杠杆贝塔。贝塔值是衡量股票与整个市场相比波动性的指标。我们的贝塔值来自全球可比公司的行业平均贝塔值，限制在0.8到2.0之间，对于稳定的业务来说，这是一个合理的范围。</blockquote> Looking Ahead:<blockquote>展望未来：</blockquote> Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Can we work out why the company is trading at a discount to intrinsic value? For Sea, we've compiled three further items you should assess:<blockquote>虽然很重要，但DCF计算不应该是你在研究一家公司时唯一考虑的指标。DCF模型并不是一个完美的股票估值工具。最好应用不同的案例和假设，看看它们将如何影响公司的估值。如果一家公司以不同的速度增长，或者如果其股权成本或无风险利率发生巨大变化，产出可能会非常不同。我们能弄清楚为什么该公司的交易价格低于内在价值吗？对于 Sea，我们还编制了您应该评估的另外三个项目：</blockquote> <ol> <li>Risks: To that end, you should be aware of the2 warning signs&nbsp;we've spotted with Sea.</li> <li>Future Earnings: How does SE's growth rate compare to its peers and the wider market?</li> <li>Other High Quality Alternatives: Do you like a good all-rounder?</li> </ol><blockquote><ol><li>风险：为此，您应该意识到2个警告标志我们发现了海。</li><li>未来盈利: SE 的增长率与同行和更广泛的市场相比如何？</li><li>其他高质量替代品你喜欢一个好的全能选手吗？</li></ol></blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://www.nasdaq.com/articles/an-intrinsic-calculation-for-sea-limited-nyse%3Ase-suggests-its-38-undervalued\">Nasdaq</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SE":"Sea Ltd"},"source_url":"https://www.nasdaq.com/articles/an-intrinsic-calculation-for-sea-limited-nyse%3Ase-suggests-its-38-undervalued","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1151093531","content_text":"Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Sea Limited (NYSE:SE) as an investment opportunity by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.\nCompanies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. For those who are keen learners of equity analysis, theSimply Wall St analysis model heremay be something of interest to you.\nThe method\nWe're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.\nA DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:(\"Est\" = FCF growth rate estimated by Simply Wall St)\nPresent Value of 10-year Cash Flow (PVCF)= US$46b\nAfter calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.0%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 6.3%.\nTerminal Value (TV)= FCF2031× (1 + g) ÷ (r – g) = US$13b× (1 + 2.0%) ÷ (6.3%– 2.0%) = US$293b\nPresent Value of Terminal Value (PVTV)= TV / (1 + r)10= US$293b÷ ( 1 + 6.3%)10= US$159b\nThe total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$204b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of US$228, the company appears quite good value at a 38% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.\nThe assumptions\nThe calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Sea as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.3%, which is based on a levered beta of 1.000. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.\nLooking Ahead:\nWhilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Can we work out why the company is trading at a discount to intrinsic value? For Sea, we've compiled three further items you should assess:\n\nRisks: To that end, you should be aware of the2 warning signs we've spotted with Sea.\nFuture Earnings: How does SE's growth rate compare to its peers and the wider market?\nOther High Quality Alternatives: Do you like a good all-rounder?","news_type":1,"symbols_score_info":{"SE":0.9}},"isVote":1,"tweetType":1,"viewCount":3592,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"CN","currentLanguage":"CN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":76,"subscribersOnly":false,"subscribersOnlyAccessible":false,"xxTargetLangEnum":"ZH_CN"},"commentList":[],"isCommentEnd":true,"isTiger":false,"isWeiXinMini":false,"url":"/m/post/691799321"}