What is CGH.L's Intrinsic value?

Chaarat Gold Holdings Ltd (CGH.L) Intrinsic Value Analysis

Executive Summary

As of June 4, 2025, Chaarat Gold Holdings Ltd's estimated intrinsic value ranges from $5.27 to $31.87 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $31.87 +22033.8%
Discounted Cash Flow (5Y) $5.27 +3557.4%

Is Chaarat Gold Holdings Ltd (CGH.L) undervalued or overvalued?

With the current market price at $0.14, 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 Chaarat Gold Holdings Ltd'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 0.7 0.87
Cost of equity 8.2% 11.1%
Cost of debt 4.0% 7.0%
Tax rate 13.4% 21.2%
Debt/Equity ratio 23.5 23.5
After-tax WACC 3.7% 5.7%

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: 4.7% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $92 (FY12-2023) to $260 (FY12-2033)
  • Net profit margin expansion from -9% to 1%
  • Capital expenditures maintained at approximately 13% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $7 $94M 109.7%
10-Year Growth $43 $390M 89.4%
5-Year EBITDA $5 $78M 111.8%
10-Year EBITDA $13 $144M 71.3%

Key Financial Metrics

Metric Value
Market Capitalization $1M
Enterprise Value $28M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 3.45
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 23.50

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% $9.56
Discounted Cash Flow (5Y) 45% $1.32
Weighted Average 100% $19.78

Investment Conclusion

Based on our comprehensive valuation analysis, Chaarat Gold Holdings Ltd's weighted average intrinsic value is $19.78, which is approximately 13635.5% above the current market price of $0.14.

Key investment considerations:

  • Strong projected earnings growth (-9% to 1% margin)

Given these factors, we believe Chaarat Gold Holdings Ltd is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.