DIVIDEND DISCOUNT MODEL

2009

2010

2011

( Div 1 )

( 0. 128)

( 0. 12)

( 0. 25 )

( r E - g)

(0.3- 0.05)

(0.3- 0.05)

(0.3- 0.05)

0.512

0.48

0.1344
0.512

0.126
0.48

0.2625
1

26.25%

26.25%

26.25%

Formula

P
P

0=

Share price (RM)

Dividend yield (%)

Div 1 Expected pay out dividend

g Constant dividend growth (5%)
r E Expected return (30%)

THE DISCOUNTED FREE CASH FLOW MODEL

2009
Formula

2010

2011

5%

5%

5%

2. Tax Rate(%)

25%

25%

25%

3. Cost of Capital(%)

30%

30%

30%

35,799,865.00
213,405,132.00

32,742,314.00
219,070,516.00

27,616,929.00
240,231,011.00

16.78%

14.95%

11.50%

(213405132 x 1.05)
224,075,388.60

(219070516 x 1.05)
230,024,041.80

(240231011 x 1.05)
252,242,561.55

(224075388.6 X 16.78%)
37,589,858.25

(230024041.8 X 14.95%)
34,379,429.70

(252242561.55 X 11.50%)
28,997,775.45

(34379429.7X (1-0.25))
25,784,572.28

(28997775.45X (1-0.25))
21,748,331.59

(25784572.275/(0.3-0.05)

(21748331.59/(0.3-0.05)

103,138,289.10

86,993,326.35

1. Revenue growth (%)

4. EBIT Margin(%)

5. Expected Revenue (RM)

6. Expected EBIT (RM)

7. FREE CASH FLOW (CFC) (RM (37589858.25 X (1-0.25))

28,192,393.69
7. VALUE (V 0) (RM)

8. Share Price (P 0)
Free Cash Flow (V 0)
(+) cash
(-) Debt

(/) Oustanding Shares (unit)

(28192393.69/ (0.3-0.05)
112,769,574.75

112,769,574.75
42,219,598
154,989,172.75
45,406,116

103,138,289.10
53,696,225
156,834,514.10
47,615,443

86,993,326.35

109,583,056.75

109,219,071.10

13,138,488.35

120,000,000

120,000,000

120,000,000

86,993,326.35
73,854,838

Share price (RM)

0.91

0.91

0.11

PRICE - EARNINGS RATIO (P/E Ratio)

Formula

2009

2010

2011

( 0.48/ 0.194)
247.42%

(1/ 0.155)
645.16%

( 0.91 / 0.194)
469.70%

( 0.11/ 0.155)
70.96%

1. Share price ( Dividend Discount Model)

P/E RATIO = (P0/EPS)

(0.512/0.224)
228.57%

P0 = Share Price
EPS = Earning Per Share
2. Share price ( Discounted Free Cash Flow Model)
P/E RATIO = (P0/EPS)
P0 = Share Price
EPS = Earning Per Share

( 0.91/0.224)
406.25%

2012

2013

( 0. 30)

( 0. 23 )

(0.3- 0.05)

(0.3- 0.05)

1.2

0.92

0.315
1.2

0.2415
0.92

26.25%

26.25%

2012

2013

5%

5%

25%

25%

30%

30%

44,351,085.00
247,818,145.00

50,081,724.00
251,407,055.00

17.90%

19.92%

(247818145 x 1.05)
260,209,052.25

(251407055 x 1.05)
263,977,407.75

(260209052.25 X 17.9%)
46,568,639.25

(263977407.75 X 19.92%)
52,585,810.20

(46568639.25X (1-0.25))
34,926,479.44

(52585810.2X (1-0.25))
39,439,357.65

(34926479.4375/(0.3-0.05)

(39439357.65/(0.3-0.05)

139,705,917.75

157,757,430.60

139,705,917.75
79,415,667
219,121,584.75
51,705,522

157,757,430.60
81,144,915
238,902,345.60
54,815,919

167,416,062.75

184,086,426.60

120,000,000

120,000,000

1.40

1.53

2012

2013

( 1.2/ 0.271)
442.80%

( 0.92 / 0.306)
300.65%

( 1.4 / 0.271)
516.6

( 1.53 / 0.306)
500%

SHARE PRICE EVALUATION

Hup Seng Industries Berha

2009

2010

2011

2012

( 0.48/ 0.194)
247.42%

(1/ 0.155)
645.16%

( 1.2/ 0.271)
442.80%

( 0.91/0.224)
406.25%

( 0.91 / 0.194)
469.70%

( 0.11/ 0.155)
70.96%

( 1.4 / 0.271)
516.6

( 0.53/0.224)
236.00%

( 0.38/ 0.194)
196.00%

( 0.35/ 0.155)
226.00%

( 0.57 / 0.271)
210.00%

2009

2010

2011

2012

(0.41/5.12)
8.00%

( 0.57 / 0.96 )
59.38%

( 0.60 / -)
-

( 0.31 / -)
-

1. Share price ( Dividend Discount Model)

P/E RATIO = (P0/EPS)

(0.512/0.224)
228.57%

P0 = Share Price
EPS = Earning Per Share
2. Share price ( Discounted Free Cash Flow Model)
P/E RATIO = (P0/EPS)
P0 = Share Price
EPS = Earning Per Share
3. Share price ( Actual Price)
P/E RATIO = (P0/EPS)
P0 = Share Price
EPS = Earning Per Share

Hwa Tai Industries Berhad

Share price
P/E RATIO = (P0/EPS)
P0 = Share Price
EPS = Earning Per Share

2013

( 0.92 / 0.306)
300.65%

( 1.53 / 0.306)
500%

( 1.21/ 0.306)
395.00%

2013

( 0.405 / 1)
40.50%