QuantaSing Group Ltd (QSG) Simple Dividend Discount Model

QuantaSing Group Ltd

QSG (NASDAQ)

(%)

Valuation
QuantaSing Group Ltd Simple Dividend Discount Model

"""
    Model: Simple Dividend Discount Model

# Render model description
model.render_description(r"""
## Simple Dividend Discount Model

This model estimates the value of companies that have reached maturity and pay stable dividends as a significant percentage of their Free Cash Flow to Equity, with little to no high growth prospects.

See our [GitHub Documentation](https://github.com/DiscountingCashFlows/Documentation/blob/main/models-documentation/dividend-discount-models.md#simple-dividend-discount-model-source-code)
""")

# Initialize assumptions
assumptions.init({
    "data": {
        "%discount_rate": None,
        "expected_dividend": None,
        "%growth_in_perpetuity": "2.5%",
        "beta": data.get("profile:beta", default=1),
        "%risk_free_rate": data.get("treasury:year10"),
        "%market_premium": data.get("risk:totalEquityRiskPremium"),
        "historical_years": None,
        "forecast_years": 5,
    },
    "hierarchies": [{
        "parent": "%discount_rate",
        "children": ["beta", "%risk_free_rate", "%market_premium"]
    }]
})

# Calculate the discount rate as the cost of equity
risk_free_rate = assumptions.get("%risk_free_rate")
beta = assumptions.get("beta")
market_premium = assumptions.get("%market_premium")
cost_of_equity = risk_free_rate + beta * market_premium

assumptions.set("%discount_rate", cost_of_equity)

# Count all dividend payments excluding None and zero values
dividend_count = data.count("dividend:adjDividend:*", properties={"except_values": [None, 0]})

if dividend_count <= 0:
    raise ValueError("The company does not currently pay dividends!")

elif dividend_count > 10:
    assumptions.set("historical_years", 10)

else:
    # Set the historical years to the number of available dividend payments
    assumptions.set("historical_years", dividend_count)

# Compute the average annual dividend growth rate
data.compute({
    "%dividendGrowth": "function:growth:dividend:adjDividend"
}, forecast=0)

# Define the averaging period for historical dividend growth
averaging_period = f"-{assumptions.get('historical_years')}->0"
average_growth_rate = data.average(f"%dividendGrowth:{averaging_period}")

# Calculate next year's expected dividend by compounding the LTM dividend
# at the average growth rate over the remaining fiscal period (using continuous compounding)
ltm_dividend = data.get("dividend:adjDividend")
if ltm_dividend is not None:
    if average_growth_rate is not None:
        data.compute({
            "dividend:adjDividend": f"""
                function:compound:{ltm_dividend}
                rate:{average_growth_rate}
                continuous:true
            """
        }, forecast=1)
        expected_dividend = data.get(f"dividend:adjDividend:1")
        assumptions.set("expected_dividend", expected_dividend)
    else:
        # Fallback to the ltm_dividend, if the average dividend
        # growth rate could not be computed
        assumptions.set("expected_dividend", ltm_dividend)
else:
    model.error("Zero dividend encountered")

# Calculate the intrinsic stock value using the Dividend Discount Model formula
stock_value = assumptions.get("expected_dividend") / (
    assumptions.get("%discount_rate") - assumptions.get("%growth_in_perpetuity"))

# Set the calculated stock value as the model's final output
model.set_final_value({
    "value": stock_value,
    "units": '$'
})

# Compute additional historical metrics for analysis
data.compute({
    "dividendsPaidToCommon": "dividend:adjDividend * income:weightedAverageShsOut",
    "%returnOnEquity": "income:netIncome / balance:totalStockholdersEquity:-1",
    "%payoutRatio": "dividend:adjDividend / income:eps",
    "%dividendYield": "dividend:adjDividend / quote:close",
    "%adjDividendGrowth": "function:growth:dividend:adjDividend",
})

# Compute projected dividends and dividend growth for the forecast period
data.compute({
    "dividend:adjDividend": f"""
        function:compound:{assumptions.get('expected_dividend')} 
        rate:{assumptions.get('%growth_in_perpetuity')}
        continuous:true
    """,
    "%adjDividendGrowth": "function:growth:dividend:adjDividend",
}, forecast=assumptions.get("forecast_years"))

# Render key results
model.render_results([
    [data.get("dividend:adjDividend:0"), "LTM Dividend", "$"],
    [average_growth_rate, "Average Dividend Growth Rate", "%"],
    [assumptions.get("expected_dividend"), "Next Year's Expected Dividend", "$"],
    [assumptions.get("%discount_rate"), 'Cost of Equity', '%'],
    [assumptions.get("%growth_in_perpetuity"), 'Expected Growth Rate', '%'],
])

# Render a chart showing historical and projected dividends
model.render_chart({
    "data": {
        "dividend:adjDividend": "Dividends",
    },
    "start": -assumptions.get("historical_years"),
    "end": "*",
    "properties": {
        "title": 'Historical and Projected Dividends',
        "include_ltm": True
    }
})

# Render a table for future dividend estimations
model.render_table({
    "data": {
        "dividend:adjDividend": "Dividend per Share",
        "%adjDividendGrowth": "Dividend Growth Rate",
    },
    "start": -1,
    "end": "*",
    "properties": {
        "title": "Future Estimations",
        "order": "ascending",
    },
})

# Render a table of historical financial values and dividend metrics
model.render_table({
    "data": {
        "income:netIncome": "Net Income",
        "balance:totalStockholdersEquity": "Equity",
        "%returnOnEquity": "Return on Equity",
        "dividendsPaidToCommon": "Common Dividends",
        "%payoutRatio": "Payout Ratio",
        "income:weightedAverageShsOut": "Shares Outstanding",
        "quote:close": "Reference Market Price",
        "income:eps": "EPS",
        "dividend:adjDividend": "Dividend per Share",
        "%adjDividendGrowth": "Dividend Growth Rate",
        "%dividendYield": "Dividend Yield",
    },
    "start": -assumptions.get("historical_years"),
    "end": 0,
    "properties": {
        "title": "Historical Values",
        "order": "descending",
        "display_averages": True,
        "number_format": "M"
    },
})

# Set descriptions 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

The 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.
    """,

"expected_dividend": r"""
        ## Expected Dividend

The estimated annual dividend per share for the next year.
    """,

"%growth_in_perpetuity": r"""
        ## Growth in Perpetuity

The rate at which the company's free cash flow is assumed to grow indefinitely. By default, this is equal to the yield of the U.S. 10-Year Treasury Bond.
    """,

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

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

"forecast_years": r"""
        ## Forecast Years
        
        The number of years into the future for which the analysis projects financial performance and metrics.
    """,
})

print("End of model.")

Estimated Value

USD

Market Price USD

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

Simple Dividend Discount Model

This model estimates the value of companies that have reached maturity and pay stable dividends as a significant percentage of their Free Cash Flow to Equity, with little to no high growth prospects.

See our GitHub Documentation

Interactive Assumptions

Discount Rate 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 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 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 Premium The 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.	%
Expected Dividend Expected Dividend Expected Dividend The estimated annual dividend per share for the next year.	#
Growth In Perpetuity Growth In Perpetuity Growth in Perpetuity The rate at which the company's free cash flow is assumed to grow indefinitely. By default, this is equal to the yield of the U.S. 10-Year Treasury Bond.	%
Historical Years Historical Years Historical Years The number of historical years used to calculate averages for historical data.	#
Forecast Years Forecast Years Forecast Years The number of years into the future for which the analysis projects financial performance and metrics.	#

Results
LTM Dividend	0.201 USD
Average Dividend Growth Rate	0%
Next Year's Expected Dividend	0.201 USD
Cost of Equity	0.109%
Expected Growth Rate	2.5%

Historical and Projected Dividends

Monetary values in USD

Future Estimations

Monetary values in USD amounts except #	2024 Jun 30	LTM Mar 11	2025 Jun 30	2026 Jun 30	2027 Jun 30	2028 Jun 30	2029 Jun 30
Dividend per Share	0.201	0.201	0.201	0.203	0.208	0.213	0.218
Dividend Growth Rate		0%	0%	0.754%	2.5%	2.51%	2.5%

Monetary values in USD

amounts except #

2024
Jun 30

LTM
Mar 11

2025
Jun 30

2026
Jun 30

2027
Jun 30

2028
Jun 30

2029
Jun 30

Dividend per Share

0.201

0.203

0.208

0.213

0.218

Dividend Growth Rate

0.754%

2.5%

2.51%

2.5%

Historical Values

Monetary values in USD amounts except #	Average	LTM Mar 11	2024 Jun 30	2023 Jun 30
Net Income	34.27	64.72	53.05	-14.96
Equity	66.61	97.91	71.07	30.84
Return on Equity	91.92%	91.06%	172%	12.7%
Common Dividends	10.98	10.91	11.05
Payout Ratio	18.78%	16.75%	20.81%
Shares Outstanding	47.97	54.26	55	34.65
Reference Market Price	5.02	4.96	1.65	8.44
EPS	0.548	1.2	0.966	-0.521
Dividend per Share	0.201	0.201	0.201
Dividend Growth Rate		0%
Dividend Yield	8.12%	4.05%	12.18%

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After-Hours Quote

QuantaSing Group Ltd Simple Dividend Discount Model

Estimated Value

USD

Market Price USD

Simple Dividend Discount Model

Interactive Assumptions

Discount Rate

Discount Rate

Beta

Beta

Risk Free Rate

Risk-Free Rate

Market Premium

Market Premium

Expected Dividend

Expected Dividend

Growth In Perpetuity

Growth in Perpetuity

Historical Years

Historical Years

Forecast Years

Forecast Years

Results

Historical and Projected Dividends

Future Estimations

Historical Values

Discounted Cash Flow to Firm - Perpetual Growth

Earnings Power Value

Simple Dividend Discount Model

Simple Excess Return Model

Two-Stage Dividend Discount Model

Two-Stage Excess Return Model

Discounted Cash Flow to Firm - Exit Multiple

Discounted Future Market Cap

Peter Lynch Fair Value

Altman Z-Score

Beneish M-Score

Capital Asset Pricing Model (CAPM)

Margin Analysis

Piotroski F-Score

Return on Invested Capital (ROIC)

Shiller PE (CAPE) Ratio

Weighted Average Cost of Capital (WACC)