Discounted Cash Flow Calculation for NYSE:CNF using Excess Returns Model Model
The calculations below outline how an intrinsic value for CNFinance Holdings 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.
CNFinance Holdings's share price is below the future cash flow value, and at a moderate discount (> 20%).
CNFinance Holdings'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
CNFinance Holdings'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 CNFinance Holdings 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 Mortgage industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare CNFinance Holdings's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare CNFinance Holdings's earnings growth to the United States of America market average as no estimate data is available.
Unable to compare CNFinance Holdings's revenue growth to the United States of America market average as no estimate data is available.
Unable to determine if CNFinance Holdings is high growth as no earnings estimate data is available.
Unable to determine if CNFinance Holdings 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.
All data from CNFinance Holdings Company Filings, last reported 3 months ago, and in
Trailing twelve months (TTM)
annual period rather than quarterly.
NYSE:CNF Future Estimates Data
Date (Data in CNY Millions)
EPS High Estimate
EPS Low Estimate
Avg. No. Analysts
NYSE:CNF Past Financials Data
Date (Data in CNY Millions)
*GAAP earnings excluding extraordinary items.
Performance in 3 years
In the same way as past performance we look at the future estimated return
(profit) compared to the available
funds. We do this looking forward 3 years.
Unable to establish if CNFinance Holdings will efficiently use shareholders’ funds in the future without estimates of Return on Equity.
Examine whether CNFinance Holdings is trading at CNFinance Holdings'san attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
CNFinance Holdings'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
1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Fundamentally a bank's business is based upon borrowing and lending money, for
this reason they typically have high levels of debt and we analyse them
This treemap shows a more detailed breakdown of
CNFinance Holdings'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.
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. Bin Zhai has been Chairman of CNFinance Holdings Limited since 2017 and also has been its Chief Executive Officer since 2010. Mr. Zhai joined CNFinance Holdings Limited in 2006, as executive director of Shenzhen Nanfeng Mortgage Advisory Co., Ltd., a subsidiary of Fanhua Inc. He served as account manager of Bank of Communications Tianjin Branch from 1991 to 1993, investment manager at China Ministry of Agriculture Shenzhen Office from 1993 to 1998 and general manager at Shenzhen Modern Warehouse Building Material Co., Ltd. from 1998 to 2006. Mr. Zhai received his bachelor’s degree in insurance from Nankai University in China.
Insufficient data for Bin to compare compensation growth.
Insufficient data for Bin to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Chairman & CEO
CFO & Executive Director
Investor Relations Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the CNFinance Holdings board of directors is about average.
Board of Directors
Chairman & CEO
CFO & Executive Director
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
CNFinance Holdings Limited, through its subsidiaries, provides home equity loan services in China. It offers micro credit loan services for micro and small-enterprise owners, and loan lending agency services for banks. The company also provides bridge loan products, which are unsecured short-term loans to pay off borrowers’ existing loans secured by real property. As of December 31, 2018, it operated a network of 64 branches and sub-branches, which included 16 branches and sub-branches in the Pearl River Delta region, 14 branches and sub-branches in the Yangtze River Delta region, and 34 branches and sub-branches in other areas in approximately 40 cities in China. The company was founded in 1999 and is headquartered in Guangzhou, China.
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