What is ADX.CN's Intrinsic value?

Advantex Marketing International Inc (ADX.CN) Intrinsic Value Analysis

Executive Summary

As of May 24, 2025, Advantex Marketing International Inc's estimated intrinsic value ranges from $0.12 to $0.17 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $0.17 +3290.7%
Discounted Cash Flow (5Y) $0.12 +2397.8%

Is Advantex Marketing International Inc (ADX.CN) undervalued or overvalued?

With the current market price at $0.01, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Advantex Marketing International Inc's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.33 5.16
Cost of equity 4.8% 35.7%
Cost of debt 5.3% 14.9%
Tax rate 25.9% 26.5%
Debt/Equity ratio 12.23 12.23
After-tax WACC 4.0% 12.8%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 8.4% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $3 (FY06-2024) to $6 (FY06-2034)
  • Net profit margin expansion from -85% to -62%
  • Capital expenditures maintained at approximately 0% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $0 $20M 71.1%
10-Year Growth $0 $24M 52.2%

Key Financial Metrics

Metric Value
Market Capitalization $1M
Enterprise Value $19M
Trailing P/E 0.00
Forward P/E -0.50
Trailing EV/EBITDA 5.05
Current Dividend Yield 58.51%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 12.23

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 55% $0.05
Discounted Cash Flow (5Y) 45% $0.03
Weighted Average 100% $0.15

Investment Conclusion

Based on our comprehensive valuation analysis, Advantex Marketing International Inc's weighted average intrinsic value is $0.15, which is approximately 2884.8% above the current market price of $0.01.

Key investment considerations:

  • Strong projected earnings growth (-85% to -62% margin)
  • Consistent cash flow generation

Given these factors, we believe Advantex Marketing International Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.