<div id="readability-page-1"><div><h3>Key Insights</h3><ul><li> Wealth Glory Holdings' estimated fair value is HK$0.52 based on 2 Stage Free Cash Flow to Equity </li> <li> With HK$0.52 share price, Wealth Glory Holdings appears to be trading close to its estimated fair value </li> <li> Wealth Glory Holdings' peers seem to be trading at a higher premium to fair value based onthe industry average of -352% </li> </ul><p>How far off is Wealth Glory Holdings Limited (HKG:8269) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced  by estimating the company's future cash flows and discounting them to their present value.  We will use the Discounted Cash Flow (DCF) model on this occasion.  It may sound complicated, but actually it is quite simple!</p><p> We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws.  For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. </p><p>We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.</p><h2> Step By Step Through The Calculation </h2> <p> We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate.  In the first stage we need to estimate the cash flows to the business over the next ten years.   Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.  </p><p> Generally we assume that a dollar today is more valuable than a dollar in the future,  and so the sum of these future cash flows is then discounted to today's value: </p><h4> 10-year free cash flow (FCF) estimate </h4><table><tbody><tr><td> </td><td><strong>2026</strong></td><td><strong>2027</strong></td><td><strong>2028</strong></td><td><strong>2029</strong></td><td><strong>2030</strong></td><td><strong>2031</strong></td><td><strong>2032</strong></td><td><strong>2033</strong></td><td><strong>2034</strong></td><td><strong>2035</strong></td></tr><tr><td><strong> Levered FCF (HK$, Millions) </strong></td><td>HK$4.75m</td><td>HK$8.14m</td><td>HK$12.3m</td><td>HK$16.7m</td><td>HK$21.1m</td><td>HK$25.2m</td><td>HK$28.7m</td><td>HK$31.8m</td><td>HK$34.5m</td><td>HK$36.8m</td></tr><tr><td><strong>Growth Rate Estimate Source</strong></td><td>Est @ 100.70%</td><td>Est @ 71.30%</td><td>Est @ 50.71%</td><td>Est @ 36.31%</td><td>Est @ 26.22%</td><td>Est @ 19.16%</td><td>Est @ 14.22%</td><td>Est @ 10.76%</td><td>Est @ 8.34%</td><td>Est @ 6.64%</td></tr><tr><td><strong> Present Value (HK$, Millions) Discounted @ 8.0% </strong></td><td>HK$4.4</td><td>HK$7.0</td><td>HK$9.7</td><td>HK$12.3</td><td>HK$14.4</td><td>HK$15.9</td><td>HK$16.8</td><td>HK$17.2</td><td>HK$17.3</td><td>HK$17.1</td></tr></tbody></table><p><i>(&#34;Est&#34; = FCF growth rate estimated by Simply Wall St)</i><br/><strong>Present Value of 10-year Cash Flow (PVCF)</strong> = HK$132m</p><p> The second stage is also known as Terminal Value, this is the business's cash flow after the first stage.  The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.7%. We discount the terminal cash flows to today's value at a cost of equity of 8.0%. </p><p><strong>Terminal Value (TV)</strong>= FCF<sub>2035</sub> × (1 + g) ÷ (r – g) = HK$37m× (1 + 2.7%) ÷ (8.0%– 2.7%) = HK$713m</p><p><strong>Present Value of Terminal Value (PVTV)</strong>= TV / (1 + r)<sup>10</sup>= HK$713m÷ ( 1 + 8.0%)<sup>10</sup>= HK$331m</p><p> The total value, or equity value, is then the sum of the present value of the future cash flows,  which in this case is HK$463m.  The last step is to then divide the equity value by the number of shares outstanding.  Relative to the current share price of HK$0.5, the company appears   around fair value    at the time of writing.   Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. </p><figure><img height="760" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/asset/chart/113993412-dcf-1-dark-2/1759445594839?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="1706" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/asset/chart/113993412-dcf-1-dark-2/1759445594839"/><figcaption>SEHK:8269 Discounted Cash Flow October 2nd 2025</figcaption></figure> <h2> The Assumptions </h2><p> We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows.  If you don't agree with these result, have a go at the calculation yourself and play with the assumptions.  The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance.  Given that we are looking at Wealth Glory Holdings as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt.  In this calculation we've used 8.0%, which is based on a levered beta of 1.039. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. </p> <p><span> View our latest analysis for Wealth Glory Holdings </span></p><h3>SWOT Analysis for Wealth Glory Holdings</h3><div><div><p><strong>Strength</strong></p><ul><li>Debt is not viewed as a risk.</li></ul> <ul>Balance sheet summary for 8269.</ul> </div><div><p><strong>Weakness</strong></p><ul><li>Current share price is above our estimate of fair value.</li></ul> <ul> Key risks with investing in 8269.</ul> </div><div><p><strong>Opportunity</strong></p><ul><li>Has sufficient cash runway for more than 3 years based on current free cash flows.</li></ul><ul><li> Significant insider buying over the past 3 months.</li></ul><ul><li>Lack of analyst coverage makes it difficult to determine 8269's earnings prospects.</li></ul></div><div><p><strong>Threat</strong></p><ul><li>No apparent threats visible for 8269.</li></ul></div></div><h2> Next Steps: </h2><p> Although the valuation of a company is important, it  is only one of many factors that you need to assess for a company.  DCF models are not the be-all and end-all of investment valuation.  Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued.  If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different.  For Wealth Glory Holdings, we've compiled three  important  items  you should further examine: </p><ol> <li> <strong>Risks</strong>: As an example, we've found <strong>3 warning signs for Wealth Glory Holdings</strong> (1 is significant!) that you need to consider before investing here. </li> <li><strong>Management</strong>:Have insiders been ramping up their shares to take advantage of the market's sentiment for 8269's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.</li><li> <strong>Other Solid Businesses</strong>: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! </li> </ol><p>PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the SEHK every day. If you want to find the calculation for other stocks just search here.</p></div></div>

08269

<p>Wealth Glory Holdings Limited (HKG:8269) has an estimated fair value of HK$0.52, with its current share price also at HK$0.52, indicating it is trading close to its intrinsic value. The company’s future cash flows were analyzed using a Discounted Cash Flow (DCF) model, estimating a total equity value of HK$463 million. The analysis suggests that Wealth Glory Holdings is fairly valued compared to its peers, which are trading at a higher premium to fair value. However, the DCF model has limitations and does not account for industry cyclicality or future capital needs.</p>

Calculating The Intrinsic Value Of Wealth Glory Holdings Limited (HKG:8269)