What is SJ1.VN's Intrinsic value?

Hung Hau Agricultural Corp (SJ1.VN) Intrinsic Value Analysis

Executive Summary

As of August 5, 2025, Hung Hau Agricultural Corp's estimated intrinsic value ranges from $13507.84 to $52276.74 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $52276.74 +375.2%
Discounted Cash Flow (5Y) $40878.31 +271.6%
Dividend Discount Model (Multi-Stage) $44478.49 +304.3%
Dividend Discount Model (Stable) $13507.84 +22.8%

Is Hung Hau Agricultural Corp (SJ1.VN) undervalued or overvalued?

With the current market price at $11000.00, 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 Hung Hau Agricultural Corp's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. 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 2.7% 3.2%
Equity market risk premium 9.5% 10.5%
Adjusted beta 0.39 0.56
Cost of equity 6.5% 9.6%
Cost of debt 7.4% 11.3%
Tax rate 21.0% 21.1%
Debt/Equity ratio 1.68 1.68
After-tax WACC 6.1% 9.2%

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: 7.6% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $1,537,926 (FY09-2024) to $2,874,965 (FY09-2034)
  • Net profit margin expansion from 2% to 9%
  • Capital expenditures maintained at approximately 5% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $40,878 $2,772,594M 81.1%
10-Year Growth $52,277 $3,268,079M 64.0%
5-Year EBITDA $27,214 $2,178,588M 76.0%
10-Year EBITDA $41,504 $2,799,795M 58.0%

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: 34.0%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 8.0%
  • Long-term growth rate: 2.0%
  • Fair value: $44478.49 (304.3% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.6% (Low) to 6.5% (High)
  • Long-term growth rate: 1.0% (Low) to 3.0% (High)
  • Fair value range: $6,435 to $20,581
  • Selected fair value: $13507.84 (22.8% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $478170M
Enterprise Value $1473780M
Trailing P/E 13.87
Forward P/E 8.11
Trailing EV/EBITDA 6.80
Current Dividend Yield 244.82%
Dividend Growth Rate (5Y) -1.94%
Debt-to-Equity Ratio 1.68

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) 33% $15683.02
Discounted Cash Flow (5Y) 28% $10219.58
Dividend Discount Model (Multi-Stage) 22% $8895.70
Dividend Discount Model (Stable) 17% $2026.18
Weighted Average 100% $40916.08

Investment Conclusion

Based on our comprehensive valuation analysis, Hung Hau Agricultural Corp's intrinsic value is $40916.08, which is approximately 272.0% above the current market price of $11000.00.

Key investment considerations:

  • Strong projected earnings growth (2% to 9% margin)
  • Consistent cash flow generation

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