What is VEIL.L's Intrinsic value?

Vietnam Enterprise Investments Limited (VEIL.L) Intrinsic Value Analysis

Executive Summary

As of June 15, 2025, Vietnam Enterprise Investments Limited's estimated intrinsic value ranges from $319.91 to $966.13 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $966.13 +73.8%
Discounted Cash Flow (5Y) $845.31 +52.0%
Dividend Discount Model (Multi-Stage) $319.91 -42.5%
Dividend Discount Model (Stable) $453.02 -18.5%

Is Vietnam Enterprise Investments Limited (VEIL.L) undervalued or overvalued?

With the current market price at $556.00, 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 Vietnam Enterprise Investments Limited'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 4.0% 4.5%
Equity market risk premium 6.0% 7.0%
Adjusted beta 1.39 1.62
Cost of equity 12.3% 16.3%
Cost of debt 4.6% 4.6%
Tax rate 19.0% 19.0%
Debt/Equity ratio 1 1
After-tax WACC 8.0% 10.0%

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: 9.0% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $217 (FY12-2024) to $340 (FY12-2034)
  • Net profit margin expansion from 81% to 66%
  • Capital expenditures maintained at approximately 0% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $1,147 $1,993M 66.6%
10-Year Growth $1,311 $2,280M 47.1%
5-Year EBITDA $1,221 $2,123M 68.7%
10-Year EBITDA $1,371 $2,386M 49.5%

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: 14.3%
  • Long-term growth rate: 0.5%
  • Fair value: $319.91 (-42.5% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 16.3% (Low) to 12.3% (High)
  • Long-term growth rate: 0.0% (Low) to 1.0% (High)
  • Fair value range: $430 to $799
  • Selected fair value: $453.02 (-18.5% from current price)

Key Financial Metrics

Metric Value
Market Capitalization $974M
Enterprise Value $962M
Trailing P/E 7.53
Forward P/E 8.88
Trailing EV/EBITDA 10.55
Current Dividend Yield 62.96%
Dividend Growth Rate (5Y) 0.00%
Debt-to-Equity Ratio 0.84

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% $289.84
Discounted Cash Flow (5Y) 28% $211.33
Dividend Discount Model (Multi-Stage) 22% $63.98
Dividend Discount Model (Stable) 17% $67.95
Weighted Average 100% $703.45

Investment Conclusion

Based on our comprehensive valuation analysis, Vietnam Enterprise Investments Limited's weighted average intrinsic value is $703.45, which is approximately 26.5% above the current market price of $556.00.

Key investment considerations:

  • Strong projected earnings growth (81% to 66% margin)
  • Consistent cash flow generation

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