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Major Indexes

Discounted Cash Flow (DCF) Analysis Unlevered


NetEase Inc.

NetEase Inc. (NTES)

$372.25
-29.51 (-7.35%)

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 1,516.021,890.933,512.975,497.108,176.939,718.2914,278.1120,977.3930,819.9945,280.7366,526.44
Revenue (%)
EBITDA 846.24903.111,261.862,020.732,066.311,549.095,174.397,602.2111,169.1616,409.7324,109.18
EBITDA (%)
EBIT 820.17874.931,233.761,973.461,945.291,247.834,948.797,270.7610,682.2115,694.3023,058.06
EBIT (%)
Depreciation 26.0828.1728.1047.28121.02301.27225.59331.44486.96715.441,051.12
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash 3,481.994,069.284,293.915,738.977,411.577,928.1820,077.8729,498.4143,339.0763,673.7693,549.48
Total Cash (%)
Account Receivables 66.40140.87402.59612.38547.04621.001,130.831,661.412,440.943,586.235,268.89
Account Receivables (%)
Inventories -4.54126.12227.03827.51725.96729.611,071.941,574.902,313.853,399.50
Inventories (%)
Accounts Payable 60.0383.58121.20201.19368.78345.00559.70822.311,208.141,775.002,607.84
Accounts Payable (%)
Capital Expenditure -35.47-88.87-133.49-163.81-380.23-559.77-576.84-847.49-1,245.13-1,829.34-2,687.67
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 372.25
Diluted Shares Outstanding 468.21
Cost of Debt
Tax Rate 28.62
After-tax Cost of Debt -1.38
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.88
Total Debt -
Total Equity 174,290.79
Total Capital 174,290.79
Debt Weighting 0.00
Equity Weighting 100.00
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 1,516.021,890.933,512.975,497.108,176.939,718.2914,278.1120,977.3930,819.9945,280.7366,526.44
EBITDA 846.24903.111,261.862,020.732,066.311,549.095,174.397,602.2111,169.1616,409.7324,109.18
EBIT 820.17874.931,233.761,973.461,945.291,247.834,948.797,270.7610,682.2115,694.3023,058.06
Tax Rate 10.67%12.23%15.90%15.34%16.80%28.62%16.59%16.59%16.59%16.59%16.59%
EBIAT 732.68767.941,037.581,670.751,618.46890.714,127.666,064.368,909.7613,090.2219,232.16
Depreciation 26.0828.1728.1047.28121.02301.27225.59331.44486.96715.441,051.12
Accounts Receivable --74.47-261.71-209.7965.34-73.96-509.83-530.58-779.53-1,145.29-1,682.66
Inventories ---121.58-100.91-600.48101.55-3.66-342.33-502.96-738.94-1,085.66
Accounts Payable -23.5437.6280.00167.59-23.78214.70262.61385.83566.86832.83
Capital Expenditure -53.4044.6230.32216.41179.5517.06270.65397.64584.21858.33
UFCF 758.76798.58764.631,517.641,588.341,375.334,071.546,056.158,897.7013,072.5019,206.12
WACC
PV UFCF 3,154.384,309.285,814.837,846.3910,587.73
SUM PV UFCF 27,471.52

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.88
Free cash flow (t + 1) 19,974.36
Terminal Value 409,310.67
Present Value of Terminal Value 267,493.05

Intrinsic Value

Enterprise Value 294,964.58
Net Debt -7,928.18
Equity Value 302,892.75
Shares Outstanding 468.21
Equity Value Per Share 646.92