As of May 31, 2025, SME Credit Realisation Fund Ltd's estimated intrinsic value ranges from $1861.27 to $4382.18 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $4382.18 | +4093.5% |
| Discounted Cash Flow (5Y) | $4114.44 | +3837.3% |
| Dividend Discount Model (Multi-Stage) | $1861.27 | +1681.1% |
| Dividend Discount Model (Stable) | $2018.39 | +1831.5% |
| Earnings Power Value | $3678.97 | +3420.5% |
Is SME Credit Realisation Fund Ltd (SCRF.L) undervalued or overvalued?
With the current market price at $104.50, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate SME Credit Realisation Fund Ltd's intrinsic value, including:
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 | 1.09 | 1.29 |
| Cost of equity | 10.5% | 14.0% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 0.0% | 0.0% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 7.7% | 9.5% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $4,114 | $222M | 69.8% |
| 10-Year Growth | $4,382 | $238M | 48.2% |
| 5-Year EBITDA | $2,392 | $125M | 46.2% |
| 10-Year EBITDA | $3,111 | $166M | 25.7% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $17M |
| Discount Rate (WACC) | 9.5% - 7.7% |
| Enterprise Value | $178M - $218M |
| Net Debt | $(10)M |
| Equity Value | $188M - $228M |
| Outstanding Shares | 0M |
| Fair Value | $3,322 - $4,036 |
| Selected Fair Value | $3678.97 |
| Metric | Value |
|---|---|
| Market Capitalization | $6M |
| Enterprise Value | $-4M |
| Trailing P/E | 0.37 |
| Forward P/E | 0.37 |
| Trailing EV/EBITDA | 4.60 |
| Current Dividend Yield | 4158.41% |
| Dividend Growth Rate (5Y) | -22.25% |
| Debt-to-Equity Ratio | 1.06 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $1314.65 |
| Discounted Cash Flow (5Y) | 25% | $1028.61 |
| Dividend Discount Model (Multi-Stage) | 20% | $372.25 |
| Dividend Discount Model (Stable) | 15% | $302.76 |
| Earnings Power Value | 10% | $367.90 |
| Weighted Average | 100% | $3386.17 |
Based on our comprehensive valuation analysis, SME Credit Realisation Fund Ltd's weighted average intrinsic value is $3386.17, which is approximately 3140.4% above the current market price of $104.50.
Key investment considerations:
Given these factors, we believe SME Credit Realisation Fund Ltd is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.