As of December 15, 2025, China HGS Real Estate Inc has a Discounted Cash Flow (DCF) derived fair value of $5.47 per share. With the current market price at $3.02, this represents a potential upside of 81.2%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $2.72 |
| DCF Fair Value (10-year) | $5.47 |
| Potential Upside (5-year) | -9.9% |
| Potential Upside (10-year) | 81.2% |
| Discount Rate (WACC) | 4.3% - 5.9% |
Revenue is projected to grow from $58 million in 09-2021 to $96 million by 09-2031, representing a compound annual growth rate of approximately 5.2%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 09-2021 | 58 | 357% |
| 09-2022 | 60 | 3% |
| 09-2023 | 64 | 6% |
| 09-2024 | 68 | 6% |
| 09-2025 | 71 | 5% |
| 09-2026 | 75 | 5% |
| 09-2027 | 77 | 2% |
| 09-2028 | 78 | 2% |
| 09-2029 | 86 | 10% |
| 09-2030 | 90 | 5% |
| 09-2031 | 96 | 6% |
Net profit margin is expected to improve from 11% in 09-2021 to 11% by 09-2031, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 09-2021 | 6 | 11% |
| 09-2022 | 7 | 11% |
| 09-2023 | 7 | 11% |
| 09-2024 | 7 | 11% |
| 09-2025 | 8 | 11% |
| 09-2026 | 8 | 11% |
| 09-2027 | 8 | 11% |
| 09-2028 | 9 | 11% |
| 09-2029 | 9 | 11% |
| 09-2030 | 10 | 11% |
| 09-2031 | 10 | 11% |
with a 5-year average of $0 million. Projected CapEx is expected to maintain at approximately 0% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 09-2022 | 0 |
| 09-2023 | 0 |
| 09-2024 | 0 |
| 09-2025 | 0 |
| 09-2026 | 0 |
| 09-2027 | 0 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 203 |
| Days Inventory | 0 |
| Days Payables | 487 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2022 | 7 | 2 | 0 | (19) | 24 |
| 2023 | 10 | 3 | 0 | (4) | 11 |
| 2024 | 10 | 3 | 0 | 9 | (2) |
| 2025 | 11 | 3 | 0 | (8) | 16 |
| 2026 | 11 | 3 | 0 | (1) | 9 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 2.72 | -9.9% |
| 10-Year DCF (Growth) | 5.47 | 81.2% |
| 5-Year DCF (EBITDA) | 4.55 | 50.6% |
| 10-Year DCF (EBITDA) | 5.98 | 97.9% |
Is China HGS Real Estate Inc (HGSH) a buy or a sell? China HGS Real Estate Inc is definitely a buy. Based on our DCF analysis, China HGS Real Estate Inc (HGSH) appears to be significantly undervalued with upside potential of 81.2%. 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 $3.02.