Xiaomi Corporation (1810.HK) Discounted Future Market Cap

Xiaomi Corporation

1810.HK (HKSE)

Valuation
Xiaomi Corporation Discounted Future Market Cap

"""
    Model: Discounted Future Market Cap

# Render model description
model.render_description(r"""
## Discounted Future Market Cap

This model estimates the intrinsic value of a common share by projecting the Future Market Capitalization using the estimated PE Ratio and then discounting it to the Present using an Annual Required Rate of Return.
""")

# Initialize assumptions
assumptions.init({
    "data": {
        "%discount_rate": None,
        "beta": data.get("profile:beta", default=1),
        "%risk_free_rate": data.get("treasury:year10"),
        "%market_premium": data.get("risk:totalEquityRiskPremium"),
        "pe_ratio": data.get("ratio:priceEarningsRatio"),
        "%revenue_growth_rate": None,
        "%net_income_margin": None,
        "historical_years": 10,
        "projection_years": 5,
    },
    "hierarchies": [{
        "parent": "%discount_rate",
        "children": ["beta", "%risk_free_rate", "%market_premium"]
    }]
})

# Calculate cost of equity
cost_of_equity = assumptions.get("%risk_free_rate") + assumptions.get("beta") * assumptions.get("%market_premium")
assumptions.set("%discount_rate", cost_of_equity)

# Compute metrics
data.compute({
    "%grossMargin": "income:grossProfit / income:revenue",
    "%operating_margin": "income:operatingIncome / income:revenue",
    "%netMargin": "income:netIncome / income:revenue",
    "%revenueGrowthRate": "function:growth:income:revenue",
    "%netIncomeGrowthRate": "function:growth:income:netIncome",
    "%totalStockholdersEquityGrowthRate": "function:growth:balance:totalStockholdersEquity",

# Calculating NOPAT (Net Operating Profit After Taxes)
    "%taxRate": "income:incomeTaxExpense / income:incomeBeforeTax",
    "incomeTax": "income:operatingIncome * %taxRate",
    "nopat": "income:operatingIncome - incomeTax",

# Calculating Invested Capital
    "investedCapital": [
        "balance:totalNonCurrentAssets", "-", "balance:cashAndCashEquivalents", "+",
        "balance:totalCurrentAssets", "-", "balance:totalCurrentLiabilities"
    ],
    "%roic": "nopat / investedCapital",
})

data.set_default_range(f"{-assumptions.get('historical_years')}->0")

assumptions.set("%net_income_margin", data.average(f"%netMargin"))
assumptions.set_bounds(
    "%net_income_margin", low=0, high="100%"
)

assumptions.set("%revenue_growth_rate", data.average(f"%revenueGrowthRate"))
assumptions.set_bounds(
    "%revenue_growth_rate", low=0, high="25%"
)

# Compute forecasted values and ratios
data.compute({
    "income:revenue": f"""
        income:revenue:-1 * 
        (1 + {assumptions.get('%revenue_growth_rate')})
    """,
    "%revenueGrowthRate": "function:growth:income:revenue",
    "income:netIncome": f"income:revenue * {assumptions.get('%net_income_margin')}",
}, forecast=assumptions.get("projection_years"))

projected_revenue = data.get("income:revenue")
projected_net_income = data.get(f"income:netIncome:{assumptions.get('projection_years')}")

shares_outstanding = data.get("income:weightedAverageShsOut")
future_market_cap = assumptions.get("pe_ratio") * projected_net_income
discounted_future_market_cap = future_market_cap / (
            (1 + assumptions.get("%discount_rate")) ** assumptions.get("projection_years"))

stock_value = discounted_future_market_cap / shares_outstanding

# Set the final value
model.set_final_value({
    "value": stock_value,
    "units": "$"
})

# Render results
model.render_results([
    [stock_value, "Present Value", "$"],
    [projected_net_income, "Estimated net income", "$"],
    [future_market_cap, "Estimated market capitalization", "$"],
    [discounted_future_market_cap, "Market capitalization discounted to present", "$"],
    [shares_outstanding, "Shares Outstanding", "#"],
    [data.get("income:eps"), "Earnings Per Share (EPS)", "$"],
    [data.get("profile:price"), "Market Price", "$"],
    [data.get("ratio:priceEarningsRatio"), "Price to Earnings (PE) Ratio", "#"]
])

# Render chart
model.render_chart({
    "data": {
        "income:revenue": "Revenue",
        "income:netIncome": "Net Income"
    },
    "start": -assumptions.get("historical_years"),
    "end": "*",
    "properties": {
        "title": "Historical and forecasted data",
        "set_editable": [
            "income:revenue",
            "income:netIncome"
        ]
    }
})

# Render table for estimated future values
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
    },
    "start": -1,
    "end": "*",
    "properties": {
        "title": "Estimated Future Values",
        "order": "ascending",
        "number_format": "M"
    }
})

# Render historical values table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "income:costOfRevenue": "Cost of Revenue",
        "income:grossProfit": "Gross Profit",
        "%grossMargin": "Gross Margin",
        "income:operatingIncome": "Operating Income",
        "%operating_margin": "Operating Margin",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Values",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Render historical growth rates table
model.render_table({
    "data": {
        "income:revenue": "Revenue",
        "%revenueGrowthRate": "Revenue Growth Rate",
        "income:netIncome": "Net Income",
        "%netMargin": "Net Margin",
        "%netIncomeGrowthRate": "Net Income Growth Rate",
        "balance:totalStockholdersEquity": "Stockholders Equity",
        "%totalStockholdersEquityGrowthRate": "Equity Growth Rate",
        "%roic": "Return on Invested Capital (ROIC)",
        "nopat": "After-tax Operating Income",
        "%taxRate": "Income Tax Rate",
        "investedCapital": "Invested Capital",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Growth Rates",
        "display_averages": True,
        "order": "descending",
        "number_format": "M"
    },
})

# Set description for assumptions
assumptions.set_description({
    "%discount_rate": r"""
        ## Discount Rate

`Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium`

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

[Read More](https://www.investopedia.com/terms/c/costofequity.asp#mntl-sc-block_1-0-20)
    """,

"beta": r"""
        ## Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.
    """,

"%risk_free_rate": r"""
        ## Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.
        By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.
    """,

"%market_premium": r"""
        ## Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.
    """,

"pe_ratio": r"""
        ## Price to Earnings (PE) Ratio

Estimated Price to Earnings (PE) Ratio at the end of the projection period.

`Future Market Cap` = `PE Ratio` * `Projected Net Income`
    """,

"%revenue_growth_rate": r"""
        ## Revenue Growth Rate

The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.
    """,

"%net_income_margin": r"""
        ## Net Income Margin

Net Income expressed as a percentage of Revenue.
    """,

"historical_years": r"""
        ## Historical Years

The number of historical years used to calculate averages for historical data.
    """,

"projection_years": r"""
        ## Projection Years

The number of years for projecting the analysis into the future.
    """,
})

print("End of model.")

Estimated Value

HKD

Market Price HKD

* Values are not guaranteed, please do your own
research before making investment decisions.

Discounted Future Market Cap

Interactive Assumptions

Discount Rate Discount Rate `Discount Rate` = `Cost of Equity` = `Risk Free Rate` + `Beta` * `Market Premium` The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula. Read More	%
↳ Beta Beta Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.	#
↳ Risk Free Rate Risk-Free Rate The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.	%
↳ Market Premium Market Premium Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.	%
Pe Ratio Price to Earnings (PE) Ratio Estimated Price to Earnings (PE) Ratio at the end of the projection period. `Future Market Cap` = `PE Ratio` * `Projected Net Income`	#
Revenue Growth Rate Revenue Growth Rate The annual revenue growth rate is applied to projected revenue starting from the second projection year onward.	%
Net Income Margin Net Income Margin Net Income expressed as a percentage of Revenue.	%
Historical Years Historical Years The number of historical years used to calculate averages for historical data.	#
Projection Years Projection Years The number of years for projecting the analysis into the future.	#

Results
Present Value	0.779 HKD
Estimated net income	1.66 Bil. HKD
Estimated market capitalization	30.61 Bil. HKD
Market capitalization discounted to present	20.18 Bil. HKD
Shares Outstanding	25.91 Bil.
Earnings Per Share (EPS)	1.93 HKD
Market Price	35.24 HKD
Price to Earnings (PE) Ratio	18.49

Historical and forecasted data

Monetary values in HKD

{"sectionId": "section-chart-1", "sectionType": "chart", "title": "Historical and forecasted data", "timeseries": "annual", "series": [{"label": "Revenue", "mappingKey": "income:revenue", "data": [{"l": "2015", "x": "2015-12-31", "y": 79752598674}, {"l": "2016", "x": "2016-12-31", "y": 76393053924}, {"l": "2017", "x": "2017-12-31", "y": 137561152874}, {"l": "2018", "x": "2018-12-31", "y": 199158702905}, {"l": "2019", "x": "2019-12-31", "y": 230251149685}, {"l": "2020", "x": "2020-12-31", "y": 292014612314}, {"l": "2021", "x": "2021-12-31", "y": 402802490000}, {"l": "2022", "x": "2022-12-31", "y": 316897808505}, {"l": "2023", "x": "2023-12-31", "y": 298012961071}, {"l": "2024", "x": "2024-12-31", "y": 389251175130}, {"l": "2025", "x": "2025-12-31", "y": 480102399405, "oy": 480102399405, "e": true, "d": 2025, "g": 23.34, "og": 23.34}, {"l": "2026", "x": "2026-12-31", "y": 592158299426, "oy": 592158299426, "e": true, "d": 2026, "g": 23.34, "og": 23.34}, {"l": "2027", "x": "2027-12-31", "y": 730368046512, "oy": 730368046512, "e": true, "d": 2027, "g": 23.34, "og": 23.34}, {"l": "2028", "x": "2028-12-31", "y": 900835948568, "oy": 900835948568, "e": true, "d": 2028, "g": 23.34, "og": 23.34}, {"l": "2029", "x": "2029-12-31", "y": 1111091058964, "oy": 1111091058964, "e": true, "d": 2029, "g": 23.34, "og": 23.34}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}, {"label": "Net Income", "mappingKey": "income:netIncome", "data": [{"l": "2015", "x": "2015-12-31", "y": -9049791841}, {"l": "2016", "x": "2016-12-31", "y": 617592975}, {"l": "2017", "x": "2017-12-31", "y": -52595601801}, {"l": "2018", "x": "2018-12-31", "y": 15432454599}, {"l": "2019", "x": "2019-12-31", "y": 11235401850}, {"l": "2020", "x": "2020-12-31", "y": 24176232100}, {"l": "2021", "x": "2021-12-31", "y": 23727412934}, {"l": "2022", "x": "2022-12-31", "y": 2799612348}, {"l": "2023", "x": "2023-12-31", "y": 19219195265}, {"l": "2024", "x": "2024-12-31", "y": 25167514438}, {"l": "2025", "x": "2025-12-31", "y": 715352575, "oy": 715352575, "e": true, "d": 2025, "g": -97.16, "og": -97.16}, {"l": "2026", "x": "2026-12-31", "y": 882315866, "oy": 882315866, "e": true, "d": 2026, "g": 23.34, "og": 23.34}, {"l": "2027", "x": "2027-12-31", "y": 1088248389, "oy": 1088248389, "e": true, "d": 2027, "g": 23.34, "og": 23.34}, {"l": "2028", "x": "2028-12-31", "y": 1342245563, "oy": 1342245563, "e": true, "d": 2028, "g": 23.34, "og": 23.34}, {"l": "2029", "x": "2029-12-31", "y": 1655525677, "oy": 1655525677, "e": true, "d": 2029, "g": 23.34, "og": 23.34}], "dataType": ".", "displayAs": "line", "dataTimeseries": "annual", "hidden": false}], "editableDates": {"2025-12-31": 11, "2026-12-31": 12, "2027-12-31": 13, "2028-12-31": 14, "2029-12-31": 15}, "properties": {"display_table": true}, "width": "full"}

Edit Chart Values	2025-12-31	2026-12-31	2027-12-31	2028-12-31	2029-12-31

↳ Growth Rate

Estimated Future Values

Monetary values in HKD amounts except #	2024 Dec 31	LTM Jan 22	2025 Dec 31	2026 Dec 31	2027 Dec 31	2028 Dec 31	2029 Dec 31
Revenue	389,251	502,271	480,102	592,158	730,368	900,836	1,111,091
Revenue Growth Rate	30.62%	29.04%	23.34%	23.34%	23.34%	23.34%	23.34%
Net Income	25,168	49,319	715.4	882.3	1,088	1,342	1,656

Monetary values in HKD

amounts except #

2024
Dec 31

LTM
Jan 22

2025
Dec 31

2026
Dec 31

2027
Dec 31

2028
Dec 31

2029
Dec 31

Revenue

389,251

502,271

480,102

592,158

730,368

900,836

1,111,091

Revenue Growth Rate

30.62%

29.04%

23.34%

Net Income

25,168

49,319

715.4

882.3

1,088

1,342

1,656

Historical Values

Monetary values in HKD amounts except #	Average	LTM Jan 22	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31	2015 Dec 31
Revenue	265,851	502,271	389,251	298,013	316,898	402,802	292,015	230,251	199,159	137,561	76,393	79,753
Cost of Revenue	219,307	390,614	307,806	234,801	263,059	331,322	248,364	198,311	173,891	119,375	68,301	76,530
Gross Profit	46,545	111,657	81,445	63,212	53,838	71,480	43,650	31,941	25,268	18,187	8,092	3,223
Gross Margin	15.31%	22.23%	20.92%	21.21%	16.99%	17.75%	14.95%	13.87%	12.69%	13.22%	10.59%	4.04%
Operating Income	17,629	47,137	26,066	22,006	3,187	31,935	28,546	13,155	1,362	14,660	4,225	1,639
Operating Margin	6.07%	9.38%	6.7%	7.38%	1.01%	7.93%	9.78%	5.71%	0.684%	10.66%	5.53%	2.05%
Net Income	10,004	49,319	25,168	19,219	2,800	23,727	24,176	11,235	15,432	-52,596	617.6	-9,050
Net Margin	0.149%	9.82%	6.47%	6.45%	0.883%	5.89%	8.28%	4.88%	7.75%	-38.23%	0.808%	-11.35%

Historical Growth Rates

Monetary values in HKD amounts except #	Average	LTM Jan 22	2024 Dec 31	2023 Dec 31	2022 Dec 31	2021 Dec 31	2020 Dec 31	2019 Dec 31	2018 Dec 31	2017 Dec 31	2016 Dec 31	2015 Dec 31
Revenue	265,851	502,271	389,251	298,013	316,898	402,802	292,015	230,251	199,159	137,561	76,393	79,753
Revenue Growth Rate	23.34%	29.04%	30.62%	-5.96%	-21.33%	37.94%	26.82%	15.61%	44.78%	80.07%	-4.21%
Net Income	10,004	49,319	25,168	19,219	2,800	23,727	24,176	11,235	15,432	-52,596	617.6	-9,050
Net Margin	0.149%	9.82%	6.47%	6.45%	0.883%	5.89%	8.28%	4.88%	7.75%	-38.23%	0.808%	-11.35%
Net Income Growth Rate	-814.1%	95.96%	30.95%	586.5%	-88.2%	-1.86%	115.2%	-27.2%	-129.3%	-8,616%	-106.8%
Stockholders Equity	86,859	290,087	200,680	179,828	160,268	168,043	146,547	89,636	81,253	-154,684	-102,835	-103,370
Equity Growth Rate	4.96%	44.55%	11.6%	12.2%	-4.63%	14.67%	63.49%	10.32%	-152.5%	50.42%	-0.517%
Return on Invested Capital (ROIC)	14.26%	13.64%	10.89%	9.36%	1.19%	13.79%	25.89%	15.49%	2.28%	44.06%	10.62%	9.66%
After-tax Operating Income	14,945	39,952	21,851	17,470	2,027	25,220	26,803	10,927	1,318	15,382	1,767	1,672
Income Tax Rate	16.99%	15.24%	16.17%	20.61%	36.39%	21.03%	6.11%	16.93%	3.23%	-4.92%	58.18%	-2.07%
Invested Capital	121,248	292,900	200,568	186,670	169,926	182,887	103,520	70,525	57,874	34,908	16,643	17,308