Definitive Analysis
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Lee & Man Chemical Company Limited (0746.HK)

Company Dividend Discount ModelIndustry: ChemicalsSector: Basic Materials

Valuation Snapshot

Stable Growth$15.89 - $28.70$21.24
Multi-Stage$27.71 - $30.45$29.05
Blended Fair Value$25.15
Current Price$3.77
Upside567.03%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-3.23%7.18%0.280.220.700.420.220.330.430.140.100.15
YoY Growth--27.26%-68.57%64.71%88.89%-31.82%-23.26%207.14%40.00%-33.33%7.14%
Dividend Yield--7.48%7.34%10.74%5.37%6.45%9.48%7.94%2.45%4.10%6.50%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)941.65
(-) Cash Dividends Paid (M)334.10
(=) Cash Retained (M)607.55
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)188.33117.7170.62
Cash Retained (M)607.55607.55607.55
(-) Cash Required (M)-188.33-117.71-70.62
(=) Excess Retained (M)419.22489.85536.93
(/) Shares Outstanding (M)827.52827.52827.52
(=) Excess Retained per Share0.510.590.65
LTM Dividend per Share0.400.400.40
(+) Excess Retained per Share0.510.590.65
(=) Adjusted Dividend0.911.001.05
WACC / Discount Rate6.35%6.35%6.35%
Growth Rate0.59%1.59%2.59%
Fair Value$15.89$21.24$28.70
Upside / Downside321.52%463.39%661.31%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)941.65956.63971.85987.301,003.011,018.961,049.53
Payout Ratio35.48%46.38%57.29%68.19%79.10%90.00%92.50%
Projected Dividends (M)334.10443.72556.75673.26793.34917.06970.82

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate6.35%6.35%6.35%
Growth Rate0.59%1.59%2.59%
Year 1 PV (M)413.11417.22421.33
Year 2 PV (M)482.58492.22501.96
Year 3 PV (M)543.31559.68576.37
Year 4 PV (M)596.04620.10644.88
Year 5 PV (M)641.46673.99707.82
PV of Terminal Value (M)20,252.8621,279.7722,347.93
Equity Value (M)22,929.3724,042.9825,200.28
Shares Outstanding (M)827.52827.52827.52
Fair Value$27.71$29.05$30.45
Upside / Downside634.97%670.67%707.76%

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