What is TAAT.CN's Intrinsic value?

Taat Lifestyle & Wellness Ltd (TAAT.CN) Intrinsic Value Analysis

Executive Summary

As of May 22, 2025, Taat Lifestyle & Wellness Ltd's estimated intrinsic value ranges from $6.29 to $35.11 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $35.11 +19964.4%
Dividend Discount Model (Multi-Stage) $6.29 +3494.9%

Is Taat Lifestyle & Wellness Ltd (TAAT.CN) undervalued or overvalued?

With the current market price at $0.17, 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 Taat Lifestyle & Wellness Ltd'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 3.2% 3.7%
Equity market risk premium 5.1% 6.1%
Adjusted beta 0.78 0.81
Cost of equity 7.1% 9.1%
Cost of debt 5.2% 7.0%
Tax rate 25.9% 26.5%
Debt/Equity ratio 4.05 4.05
After-tax WACC 4.5% 5.9%

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: 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 5.2% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $95 (FY10-2023) to $126 (FY10-2033)
  • Net profit margin expansion from -12% to 10%
  • Capital expenditures maintained at approximately 22% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $(1,234) $(89)M 80.4%
10-Year Growth $35 $434M 96.7%
5-Year EBITDA $17 $216M 108.1%
10-Year EBITDA $27 $329M 95.7%

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: 8.1%
  • Long-term growth rate: 3.6%
  • Fair value: $6.29 (3494.9% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 9.1% (Low) to 7.1% (High)
  • Long-term growth rate: 3.0% (Low) to 4.3% (High)
  • Fair value range: $(2) to $(6)
  • Selected fair value: $-4.33 (-2572.9% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $2M
Enterprise Value $8M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 11.90
Current Dividend Yield 58.51%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 4.05

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) 60% $10.53
Dividend Discount Model (Multi-Stage) 40% $1.26
Weighted Average 100% $23.58

Investment Conclusion

Based on our comprehensive valuation analysis, Taat Lifestyle & Wellness Ltd's weighted average intrinsic value is $23.58, which is approximately 13376.6% above the current market price of $0.17.

Key investment considerations:

  • Strong projected earnings growth (-12% to 10% margin)
  • Consistent cash flow generation

Given these factors, we believe Taat Lifestyle & Wellness Ltd is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.