Discounted Cash Flow Calculation for DB:LPS1 using Excess Returns Model Model
The calculations below outline how an intrinsic value for Lippo Securities is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Lippo Securities's share price is below the future cash flow value, and at a moderate discount (> 20%).
Lippo Securities's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Lippo Securities's earnings available for a low price, and how does
this compare to other companies in the same industry?
In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Lippo Securities has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.
This is quite a rare situation as 97% of companies covered by Simply Wall St do have past financial data. You can see them here.
Show me the analysis anyway
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected Capital Markets industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare Lippo Securities's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare Lippo Securities's earnings growth to the Germany market average as no estimate data is available.
Unable to compare Lippo Securities's revenue growth to the Germany market average as no estimate data is available.
Unable to determine if Lippo Securities is high growth as no earnings estimate data is available.
Unable to determine if Lippo Securities is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Lippo Securities's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Lippo Securities's finances.
The net worth of a company is the difference between its assets and liabilities.
Lippo Securities is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Lippo Securities's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Lippo Securities's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
Lippo Securities has no debt, it does not need to be covered by short term assets.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
Mr. Peter Indra Lembong served as Loan Review & Credit Analysis Officer at Bank of Tokyo from 1992 to 1994. From 1994 to 1997, Mr. Lembong served as Corporate Finance Manager at PT Jardine Fleming Nusantara and also served as its Vice President of Corporate Finance since 1997. From 2001 to 2003, he served as President Director of PT Jardine Fleming Nusantara. Before rejoining PT Jardine Fleming Nusantara in 2004, he served as President Director of PT Aryaduta Hotels Tbk since 2003. Mr. Lembong serves as a Director of PT Lippo Securities Tbk and is responsible for Marketing & Investor’s Complain Handling Function. He served as Director of PT Jardine Fleming Nusantara since 1999. He graduated from Cornell University, Ithaca, New York, USA with Master degree of Engineering in Operation Research & Industrial Engineering.
Insufficient data for Peter to compare compensation growth.
Insufficient data for Peter to establish whether their remuneration is reasonable compared to companies of similar size in Germany.
Finance & Accounting Manager and Corporate Secretary
Chief Investment Officer
Head of Research & IT Function
Head of Human Resource
Head of Internal Audit
Head of Dealing Function
Head of Settlement Function
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Lippo Securities board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
PT Lippo Securities Tbk provides investment management services in Indonesia. The company was formerly known as PT.Lippin Securities and changed its name to PT Lippo Securities Tbk in December 1990. The company was founded in 1989 and is based in Tangerang, Indonesia. PT Lippo Securities Tbk is a subsidiary of Pacific Asia Holdings Ltd.
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