What is HKIB's Intrinsic value?

Amtd International Inc (HKIB) Intrinsic Value Analysis

Executive Summary

As of June 21, 2025, Amtd International Inc's estimated intrinsic value ranges from $5.87 to $10.11 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Dividend Discount Model (Multi-Stage) $5.87 +50.5%
Dividend Discount Model (Stable) $10.11 +159.2%

Is Amtd International Inc (HKIB) undervalued or overvalued?

With the current market price at $3.90, 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 Amtd International Inc's intrinsic value, including:

  1. Dividend Discount Model (DDM): Values the company based on expected future dividend payments

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 4.2% 5.2%
Adjusted beta 0.95 0.98
Cost of equity 7.2% 9.3%
Cost of debt 5.0% 5.0%
Tax rate 14.2% 15.6%
Debt/Equity ratio 0.04 0.04
After-tax WACC 7.1% 9.1%

Valuation Methods

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 0.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 8.3%
  • Long-term growth rate: 0.5%
  • Fair value: $5.87 (50.5% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.3% (Low) to 7.2% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $54 to $104
  • Selected fair value: $10.11 (159.2% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $958M
Enterprise Value $926M
Trailing P/E 4.25
Forward P/E 6.54
Trailing EV/EBITDA 0.00
Current Dividend Yield 0.00%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.04

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
Dividend Discount Model (Multi-Stage) 57% $1.17
Dividend Discount Model (Stable) 43% $1.52
Weighted Average 100% $7.69

Investment Conclusion

Based on our comprehensive valuation analysis, Amtd International Inc's weighted average intrinsic value is $7.69, which is approximately 97.1% above the current market price of $3.90.

Key investment considerations:

  • Conservative capital structure (Debt/Equity of 0.04)

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