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Shanghai Gench Education Group Limited (1525.HK)

Company Dividend Discount ModelIndustry: Education & Training ServicesSector: Consumer Defensive

Valuation Snapshot

Stable Growth$11.21 - $17.24$14.02
Multi-Stage$24.31 - $26.79$25.53
Blended Fair Value$19.77
Current Price$2.48
Upside697.24%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR202420232022202120202019201820172016
DPS0.00%0.00%0.180.180.180.160.090.000.000.000.000.00
YoY Growth---0.13%2.93%13.79%78.81%0.00%0.00%0.00%0.00%0.00%0.00%
Dividend Yield--6.69%5.31%5.21%3.92%1.60%0.00%0.00%0.00%0.00%0.00%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)485.59
(-) Cash Dividends Paid (M)108.42
(=) Cash Retained (M)377.17
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)97.1260.7036.42
Cash Retained (M)377.17377.17377.17
(-) Cash Required (M)-97.12-60.70-36.42
(=) Excess Retained (M)280.05316.47340.75
(/) Shares Outstanding (M)395.13395.13395.13
(=) Excess Retained per Share0.710.800.86
LTM Dividend per Share0.270.270.27
(+) Excess Retained per Share0.710.800.86
(=) Adjusted Dividend0.981.081.14
WACC / Discount Rate6.59%6.59%6.59%
Growth Rate-2.00%-1.00%0.00%
Fair Value$11.21$14.02$17.24
Upside / Downside352.03%465.22%595.08%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)485.59480.73475.92471.16466.45461.79475.64
Payout Ratio22.33%35.86%49.40%62.93%76.47%90.00%92.50%
Projected Dividends (M)108.42172.40235.09296.51356.67415.61439.97

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate6.59%6.59%6.59%
Growth Rate-2.00%-1.00%0.00%
Year 1 PV (M)160.10161.73163.37
Year 2 PV (M)202.74206.90211.10
Year 3 PV (M)237.47244.81252.30
Year 4 PV (M)265.27276.27287.60
Year 5 PV (M)287.05302.00317.57
PV of Terminal Value (M)8,454.038,894.269,352.63
Equity Value (M)9,606.6710,085.9710,584.57
Shares Outstanding (M)395.13395.13395.13
Fair Value$24.31$25.53$26.79
Upside / Downside880.35%929.26%980.14%

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