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Lee & Man Chemical Company Limited

Intrinsic Value Analysis (Discounted Cash Flow)Industry: ChemicalsSector: Basic Materials

Fair Value Summary

Current Price$5.37
5Y Range-6.77 – -3.33
5Y Selected-5.05
(-) Safety Margin84.99%
5Y Buy Price$-0.94
Upside (to Buy Price)-117.44%
10Y Range-7.13 – -3.61
10Y Selected-5.37
(-) Safety Margin84.99%
10Y Buy Price$-1.00
Upside (to Buy Price)-118.54%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.0067
Revenue R2 (10Y)0.5678
Net Income R2 (5Y)0.1216
Net Income R2 (10Y)0.1108
EBITDA R2 (5Y)0.1372
EBITDA R2 (10Y)0.0900
FCF R2 (5Y)0.1194
FCF R2 (10Y)0.0956
Safety Score0.1854

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth3.97%3.97%3.97%3.98%3.98%3.98%3.99%3.99%4.00%4.00%
Revenue4,107.504,270.544,440.224,616.804,800.594,991.885,190.985,398.225,613.945,838.50
EBITDA705.18733.17762.30792.62824.17857.01891.19926.77963.801,002.36
D&A-57.43-59.71-62.08-64.55-67.12-69.80-72.58-75.48-78.49-81.63
EBIT647.75673.46700.22728.06757.05787.21818.61851.29885.31920.72
Pro forma Taxes-137.07-142.51-148.17-154.07-160.20-166.58-173.23-180.14-187.34-194.84
NOPAT510.68530.95552.04574.00596.85620.63645.38671.15697.97725.89
Capital Expenditures-686.14-713.37-741.71-771.21-801.91-833.86-867.12-901.74-937.78-975.29
NWC Investment-11.17-11.62-12.09-12.59-13.10-13.63-14.19-14.77-15.38-16.01
(+) D&A57.4359.7162.0864.5567.1269.8072.5875.4878.4981.63
Free Cash Flow-129.20-134.33-139.68-145.25-151.04-157.07-163.35-169.89-176.69-183.77
Diluted Shares Outstanding827,521,806.75827,521,806.75827,521,806.75827,521,806.75827,521,806.75827,521,806.75827,521,806.75827,521,806.75827,521,806.75827,521,806.75

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start6/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point9/30/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 6.35%Terminal Growth: 2.28%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.910.860.810.760.710.670.630.59
PV UFCF-128.40-130.58-127.67-124.83-122.05-119.35-116.70-114.12-111.60-109.14
Raw: -3,796.83
-2,975.04
Raw: -4,619.57
-2,660.28

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-3,608.58-3,864.72
(-) Net Debt45.5845.58
Equity Value-3,654.16-3,910.30
(/) Shares Out827.52827.52
Fair Value$-4.42$-4.73
(-) Safety Margin84.99%84.99%
Buy Price$-0.66$-0.71
Current Price$5.37$5.37
Upside (to Buy Price)-112.34%-113.21%

Conservative Projected Flows

WACC: 7.35%Terminal Growth: 1.78%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.900.840.780.730.680.630.590.55
PV UFCF-128.28-130.02-125.94-121.99-118.16-114.47-110.89-107.43-104.07-100.83
Raw: -2,760.60
-2,084.40
Raw: -3,358.80
-1,778.66

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-2,708.79-2,940.73
(-) Net Debt45.5845.58
Equity Value-2,754.37-2,986.32
(/) Shares Out827.52827.52
Fair Value$-3.33$-3.61
(-) Safety Margin84.99%84.99%
Buy Price$-0.50$-0.54
Current Price$5.37$5.37
Upside (to Buy Price)-109.30%-110.09%

Aggressive Projected Flows

WACC: 5.35%Terminal Growth: 2.78%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.980.930.880.830.790.750.710.680.64
PV UFCF-128.52-131.15-129.44-127.76-126.11-124.48-122.88-121.30-119.75-118.22
Raw: -6,043.12
-4,915.65
Raw: -7,352.62
-4,608.17

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-5,558.64-5,857.79
(-) Net Debt45.5845.58
Equity Value-5,604.22-5,903.38
(/) Shares Out827.52827.52
Fair Value$-6.77$-7.13
(-) Safety Margin84.99%84.99%
Buy Price$-1.02$-1.07
Current Price$5.37$5.37
Upside (to Buy Price)-118.93%-119.94%

Reverse DCF: Market Implied Growth

Current Price$5.37
WACC Used6.4%
IMPLIED REVENUE GROWTH83.56%
Metric2027202820292030203120322033203420352036
Implied Revenue12,796.2423,488.4143,114.6579,140.02145,267.15266,648.20489,451.79898,423.651,649,120.653,027,078.52
Constant Implied Growth83.56%83.56%83.56%83.56%83.56%83.56%83.56%83.56%83.56%83.56%
Implied Free Cash Flow1.282.354.317.9114.5326.6648.9589.84164.91302.71
Discount Factor0.960.860.810.760.710.670.630.590.560.53
Present Value of Implied FCF1.232.023.486.0110.3817.9130.9153.3692.09158.94

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$3.472.38%$4.3625.55%
20182018-12-31$5.409.44%$21.38295.85%
20172017-12-31$5.6912.29%$6.015.61%
20162016-12-31$2.438.89%$-1.93-179.62%
20152015-12-31$2.3012.28%$2.362.48%
20142014-12-31$4.6621.83%$-29.34-729.58%
20132013-12-31$4.1923.76%$-31.96-862.83%
20122012-12-31$4.3017.61%$3.31-23.03%
20112011-12-31$4.686.02%$13.76193.94%
20102010-12-31$7.86-0.91%$7.26-7.69%
20092009-12-31$3.76-9.39%$0.93-75.36%
20082008-12-31$0.50-4.50%$-2.43-586.37%
20072007-12-31$2.559.67%$-6.75-364.59%
20062006-12-31$1.8123.68%$2.8155.08%
20052005-03-31$1.3428.54%$7.14433.18%
20042004-03-31$1.3412.34%$2.5792.12%
20032003-03-31$0.850.29%$1.5279.12%
20022002-03-31$0.55-6.45%$0.8452.57%
20012001-03-31$0.53-0.21%$1.55192.99%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$-5.12
Median
$-4.66
10th Percentile
$-6.89
90th Percentile
$-3.59

Fair Value Distribution

$-20.02 - $-19.15
1
$-19.15 - $-18.28
0
$-18.28 - $-17.42
1
$-17.42 - $-16.55
0
$-16.55 - $-15.68
0
$-15.68 - $-14.81
0
$-14.81 - $-13.94
4
$-13.94 - $-13.07
1
$-13.07 - $-12.20
3
$-12.20 - $-11.33
3
$-11.33 - $-10.47
4
$-10.47 - $-9.60
9
$-9.60 - $-8.73
18
$-8.73 - $-7.86
23
$-7.86 - $-6.99
31
$-6.99 - $-6.12
79
$-6.12 - $-5.25
164
$-5.25 - $-4.38
264
$-4.38 - $-3.52
312
$-3.52 - $-2.65
83