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Wenzhou Kangning Hospital Co., Ltd.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Medical - Care FacilitiesSector: Healthcare

Fair Value Summary

Current Price$10.97
5Y Range-60.22 – -27.67
5Y Selected-43.95
(-) Safety Margin77.20%
5Y Buy Price$-11.16
Upside (to Buy Price)-201.75%
10Y Range-62.53 – -29.69
10Y Selected-46.11
(-) Safety Margin77.20%
10Y Buy Price$-11.71
Upside (to Buy Price)-206.76%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.9163
Revenue R2 (10Y)0.9825
Net Income R2 (5Y)0.0541
Net Income R2 (10Y)0.0221
EBITDA R2 (5Y)0.0432
EBITDA R2 (10Y)0.4603
FCF R2 (5Y)0.1178
FCF R2 (10Y)0.4371
Safety Score0.2540

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth13.19%12.17%11.15%10.13%9.11%8.09%7.06%6.04%5.02%4.00%
Revenue1,872.512,100.402,334.572,571.012,805.133,031.933,246.103,442.243,615.093,759.69
EBITDA326.33366.05406.86448.06488.86528.39565.71599.90630.02655.22
D&A-152.23-170.76-189.80-209.02-228.05-246.49-263.90-279.85-293.90-305.66
EBIT174.10195.29217.06239.04260.81281.90301.81320.05336.12349.56
Pro forma Taxes-60.19-67.51-75.04-82.64-90.16-97.45-104.34-110.64-116.20-120.84
NOPAT113.91127.78142.02156.40170.65184.44197.47209.40219.92228.72
Capital Expenditures-326.83-366.61-407.48-448.75-489.62-529.20-566.58-600.82-630.99-656.23
NWC Investment-13.34-13.94-14.32-14.46-14.32-13.87-13.10-11.99-10.57-8.84
(+) D&A152.23170.76189.80209.02228.05246.49263.90279.85293.90305.66
Free Cash Flow-74.03-82.01-89.98-97.79-105.23-112.13-118.30-123.56-127.74-130.70
Diluted Shares Outstanding73,943,904.0073,943,904.0073,943,904.0073,943,904.0073,943,904.0073,943,904.0073,943,904.0073,943,904.0073,943,904.0073,943,904.00

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)0.100.451.452.463.464.465.466.467.468.46
Valuation Date1/17/26

Base Case Projected Flows

WACC: 6.83%Terminal Growth: 3.11%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.910.850.800.740.700.650.610.57
PV UFCF-73.55-79.61-81.76-83.12-83.73-83.51-82.47-80.63-78.03-74.73
Raw: -2,919.58
-2,247.42
Raw: -3,626.04
-2,005.94

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-2,649.18-2,807.07
(-) Net Debt114.73114.73
Equity Value-2,763.91-2,921.80
(/) Shares Out73.9473.94
Fair Value$-37.38$-39.51
(-) Safety Margin77.20%77.20%
Buy Price$-8.52$-9.01
Current Price$10.97$10.97
Upside (to Buy Price)-177.69%-182.13%

Conservative Projected Flows

WACC: 7.83%Terminal Growth: 2.61%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.900.830.770.710.660.610.570.53
PV UFCF-73.48-79.27-80.67-81.23-81.07-80.11-78.38-75.92-72.79-69.07
Raw: -2,069.99
-1,535.71
Raw: -2,570.87
-1,308.31

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-1,931.43-2,080.30
(-) Net Debt114.73114.73
Equity Value-2,046.16-2,195.03
(/) Shares Out73.9473.94
Fair Value$-27.67$-29.69
(-) Safety Margin77.20%77.20%
Buy Price$-6.31$-6.77
Current Price$10.97$10.97
Upside (to Buy Price)-157.51%-161.70%

Aggressive Projected Flows

WACC: 5.83%Terminal Growth: 3.61%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.970.920.870.820.780.730.690.660.62
PV UFCF-73.62-79.95-82.89-85.06-86.50-87.09-86.82-85.68-83.70-80.92
Raw: -4,919.03
-3,930.23
Raw: -6,109.31
-3,676.82

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-4,338.23-4,509.03
(-) Net Debt114.73114.73
Equity Value-4,452.96-4,623.76
(/) Shares Out73.9473.94
Fair Value$-60.22$-62.53
(-) Safety Margin77.20%77.20%
Buy Price$-13.73$-14.26
Current Price$10.97$10.97
Upside (to Buy Price)-225.16%-229.96%

Reverse DCF: Market Implied Growth

Current Price$10.97
WACC Used6.8%
IMPLIED REVENUE GROWTH71.89%
Metric2027202820292030203120322033203420352036
Implied Revenue5,519.829,488.2116,309.5928,035.1048,190.4682,836.18142,389.85244,758.62420,723.70723,195.89
Constant Implied Growth71.89%71.89%71.89%71.89%71.89%71.89%71.89%71.89%71.89%71.89%
Implied Free Cash Flow0.550.951.632.804.828.2814.2424.4842.0772.32
Discount Factor0.950.850.800.740.700.650.610.570.540.50
Present Value of Implied FCF0.530.811.302.093.365.418.7013.9922.5236.23

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$18.3111.43%$-10.27-156.11%
20182018-12-31$31.1515.67%$-32.06-202.93%
20172017-12-31$37.4517.57%$-53.74-243.49%
20162016-12-31$30.4316.47%$-52.60-272.85%
20152015-12-31$38.7120.07%$-69.87-280.49%
20142014-12-31$39.2318.27%$-12.33-131.44%
20132013-12-31$38.3121.38%$-3.72-109.72%
20122012-12-31$39.4615.64%$-9.19-123.28%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$-44.36
Median
$-39.33
10th Percentile
$-63.09
90th Percentile
$-29.67

Fair Value Distribution

$-290.60 - $-276.75
1
$-276.75 - $-262.90
1
$-262.90 - $-249.05
0
$-249.05 - $-235.20
0
$-235.20 - $-221.35
0
$-221.35 - $-207.51
0
$-207.51 - $-193.66
0
$-193.66 - $-179.81
0
$-179.81 - $-165.96
3
$-165.96 - $-152.11
3
$-152.11 - $-138.26
0
$-138.26 - $-124.41
1
$-124.41 - $-110.56
4
$-110.56 - $-96.71
7
$-96.71 - $-82.86
13
$-82.86 - $-69.02
35
$-69.02 - $-55.17
86
$-55.17 - $-41.32
287
$-41.32 - $-27.47
515
$-27.47 - $-13.62
44