As of May 22, 2025, Churchill China PLC has a Discounted Cash Flow (DCF) derived fair value of $973.59 per share. With the current market price at $550.00, this represents a potential upside of 77.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $906.03 |
| DCF Fair Value (10-year) | $973.59 |
| Potential Upside (5-year) | 64.7% |
| Potential Upside (10-year) | 77.0% |
| Discount Rate (WACC) | 8.5% - 10.9% |
Revenue is projected to grow from $78 million in 12-2024 to $105 million by 12-2034, representing a compound annual growth rate of approximately 3.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 78 | 5% |
| 12-2025 | 81 | 3% |
| 12-2026 | 84 | 5% |
| 12-2027 | 86 | 2% |
| 12-2028 | 90 | 5% |
| 12-2029 | 92 | 2% |
| 12-2030 | 94 | 3% |
| 12-2031 | 97 | 4% |
| 12-2032 | 99 | 2% |
| 12-2033 | 101 | 2% |
| 12-2034 | 105 | 4% |
Net profit margin is expected to improve from 8% in 12-2024 to 8% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 6 | 8% |
| 12-2025 | 7 | 8% |
| 12-2026 | 7 | 8% |
| 12-2027 | 7 | 8% |
| 12-2028 | 7 | 8% |
| 12-2029 | 7 | 8% |
| 12-2030 | 8 | 8% |
| 12-2031 | 8 | 8% |
| 12-2032 | 8 | 8% |
| 12-2033 | 8 | 8% |
| 12-2034 | 9 | 8% |
with a 5-year average of $4 million. Projected CapEx is expected to maintain at approximately 6% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 4 |
| 12-2026 | 5 |
| 12-2027 | 5 |
| 12-2028 | 5 |
| 12-2029 | 5 |
| 12-2030 | 5 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 53 |
| Days Inventory | 558 |
| Days Payables | 99 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2025 | 13 | 2 | 5 | (24) | 30 |
| 2026 | 14 | 2 | 5 | 0 | 6 |
| 2027 | 14 | 2 | 5 | 1 | 6 |
| 2028 | 14 | 2 | 5 | 0 | 6 |
| 2029 | 15 | 3 | 5 | 0 | 7 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 906.03 | 64.7% |
| 10-Year DCF (Growth) | 973.59 | 77.0% |
| 5-Year DCF (EBITDA) | 930.54 | 69.2% |
| 10-Year DCF (EBITDA) | 982.42 | 78.6% |
Is Churchill China PLC (CHH.L) a buy or a sell? Churchill China PLC is definitely a buy. Based on our DCF analysis, Churchill China PLC (CHH.L) appears to be significantly undervalued with upside potential of 77.0%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $550.00.