Discounted Cash Flow Calculation for GTSM:1795 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
Note: Free cash flow to equity valuations ignore the company's cash or debt.
GTSM:1795 DCF 1st Stage: Next 10 year cash flow forecast
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.
Lotus Pharmaceutical's share price is below the future cash flow value, and at a moderate discount (> 20%).
Lotus Pharmaceutical's share price is below the future cash flow value, and 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
Lotus Pharmaceutical's earnings available for a low price, and how does
this compare to other companies in the same industry?
Lotus Pharmaceutical's earnings are expected to grow significantly at over 20% yearly.
Lotus Pharmaceutical's revenue is expected to grow by 20% yearly, however this is not considered high growth (20% yearly).
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.
Lotus Pharmaceutical'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
5/6, 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
Lotus Pharmaceutical's finances.
The net worth of a company is the difference between its assets and liabilities.
Lotus Pharmaceutical is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Lotus Pharmaceutical's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Lotus Pharmaceutical'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.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.9x debt.
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.
TENURE AS CEO
Mr. Petar Antonov Vazharov General Manager at Lotus Pharmaceutical Co., Ltd. since January 16, 2018 and was Vice Chairman since October 27, 2016. Mr. Vazharov served as an Executive Vice President, APAC at Lotus Pharmaceutical Co., Ltd. Mr. Vazharov has been an Executive Vice President of Sales & Marketing - Asia Pacific at Alvogen, Inc. since February 23, 2016. Mr. Vazharov served as Executive Vice President Sales & Marketing - Central and Eastern Europe at Alvogen, Inc. until February 23, 2016. Mr. Vazharov joined Alvogen in December 2009. He served with the generic pharmaceuticals company Actavis Group for nine years in various roles such as Sales Representative, Division Head in Central Marketing and Senior Manager in Global Business Development and has demonstrated his ability to lead the CEE business by delivering 75% CAGR of EBITDA from 2013 to 2015. He has been a Director of Lotus Pharmaceutical Co., Ltd since September 29, 2014. He graduated with a medical doctor’s degree from Sofia University of Medicine in 1999 and has an MBA degree from University of Sofia “Kliment Ohridski” since October 2007.
Insufficient data for Petar to compare compensation growth.
Insufficient data for Petar to establish whether their remuneration is reasonable compared to companies of similar size in Taiwan, Province of China.
Management Team Tenure
Average tenure of the
management team in years:
The average tenure for the Lotus Pharmaceutical management team is less than 2 years, this suggests a new team.
GM & Director
Chief Financial Officer
Vice President of Supply Chain & Operations
Chief Executive Officer of Norwich Clicial Services
Deputy General Manger of Strategy & Finance
Yao Le Hong
Board of Directors Tenure
Average tenure of the
board of directors in years:
The tenure for the Lotus Pharmaceutical board of directors is about average.
Board of Directors
GM & Director
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
Lotus Pharmaceutical Co., Ltd. researches, develops, manufactures, and sells pharmaceutical products in Taiwan and internationally. Its product portfolio focuses on generics in the fields of oncology, cardiology, nephrology, and central nervous system disease. The company also sells and markets a portfolio of over-the-counter medicines. In addition, it offers contract manufacturing services; and a range of clinical services to the pharmaceutical and biotech industries, as well as drug consulting services. Lotus Pharmaceutical Co., Ltd. was founded in 1966 and is headquartered in Taipei City, Taiwan. Lotus Pharmaceutical Co., Ltd. is a subsidiary of Alvogen Emerging Markets Holdings Limited.
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