SSE: 601808 - China Oilfield Services Limited

Price = EPS * (1 + CAGR EPS) / (Key Rate * Excess Key Rate)
EPS = Earning Per Share
CAGR EPS = CAGR 5 EPS
Key Rate — Key rate
Excess Key Rate — Desired excess of the key rate
EPS = 0.6315
CAGR EPS = 3.96%
Key Rate = 0.0433
Excess Key Rate = 2
Price = 0.6315 * (1 + 3.96%) / (0.0433 * 2) = 7.58

Price = (Terminal Value + Company Value) / Count shares
Price - Fair price
Terminal Value — cost in the post-forecast period
Company Value — cost during the forecast period
Count shares - Number of shares
Terminal Value = Discount Ebitda(5) * (1 + Ebitda Yield) / (WACC - Ebitda Yield)
Company Value = ∑ (Discount Ebitda / (1 + WACC) ^ 5)
Discount Ebitda(5) = 2.07
Ebitda Yield = -0.1222
WACC = (Interest Expense / Debt) * (Weight Cost Debt) * (1 - Tax) + Cost Of Equity * Weight Debt
Interest Expense - Debt servicing costs
Debt - Debt
Weight Debt - Capitalization weight relative to debt
Weight Cost Debt - Debt weight relative to capitalization
Tax - Tax
Interest Expense = 0.9694
Debt = 21.91
Market Cap = 53.16
Weight Debt = Market Cap / (Market Cap + Debt) = 53.16 / (53.16 + 21.91) = 0.7081
Weight Cost Debt = 100% - 0.7081 = 0.2919
Tax = 0.21
Cost Of Equity — discount rate
Cost Of Equity = k(f) + β * Risk Premium + Country Premium (Damodaran table)
k(f) — risk-free rate of return
β (beta) — determines the measure of risk of a stock (asset) in relation to the market and shows the sensitivity of changes in the stock's profitability in relation to changes in market profitability. Beta can be calculated not only for an individual stock, but also for an investment portfolio.
Risk Premium — risk premium - premium for the risk of investing in shares
Country Premium - country risk
k(f) = 2.89
β = 1.52
Risk Premium = 5.94
Country Premium = 0
Cost Of Equity = 2.89 + 1.52 * 5.94 + 0 = 0.119
WACC = (0.9694 / 21.91) * (100% - 0.7081) * (1 - 0.21) + 0.119 + 0.7081 = 3.55
Terminal Value = Discount (2.07 * (1 + -0.1222) / (3.55 - -0.1222)) = 9.69
Company Value = ∑ (2.07 / (1 + 3.55) ^ 5) = 12.45
Price = (Terminal Value + Company Value) / Count shares = (9.69 + 12.45) / 4771590000 = 4.64

Price = (Terminal Value + Company Value) / Count shares
Price - Fair price
Terminal Value — cost in the post-forecast period
Company Value — cost during the forecast period
Count shares - Number of shares
Terminal Value = Discount FCF(5) * (1 + FCF Yield) / (WACC - FCF Yield)
Company Value = ∑ (Discount FCF / (1 + WACC) ^ 5)
Discount FCF(5) = 3.37
FCF Yield = -0.0144
WACC = (Interest Expense / Debt) * (Weight Cost Debt) * (1 - Tax) + Cost Of Equity * Weight Debt
Interest Expense - Debt servicing costs
Debt - Debt
Weight Debt - Capitalization weight relative to debt
Weight Cost Debt - Debt weight relative to capitalization
Tax - Tax
Interest Expense = 0.9694
Debt = 21.91
Market Cap = 53.16
Weight Debt = Market Cap / (Market Cap + Debt) = 53.16 / (53.16 + 21.91) = 0.7081
Weight Cost Debt = 100% - 0.7081 = 0.2919
Tax = 0.21
Cost Of Equity — discount rate
Cost Of Equity = k(f) + β * Risk Premium + Country Premium (Damodaran table)
k(f) — risk-free rate of return
β (beta) — determines the measure of risk of a stock (asset) in relation to the market and shows the sensitivity of changes in the stock's profitability in relation to changes in market profitability. Beta can be calculated not only for an individual stock, but also for an investment portfolio.
Risk Premium — risk premium - premium for the risk of investing in shares
Country Premium - country risk
k(f) = 2.89
β = 1.52
Risk Premium = 5.94
Country Premium = 0
Cost Of Equity = 2.89 + 1.52 * 5.94 + 0 = 0.119
WACC = (0.9694 / 21.91) * (100% - 0.7081) * (1 - 0.21) + 0.119 + 0.7081 = 3.55
Terminal Value = Discount (3.37 * (1 + -0.0144) / (3.55 - -0.0144)) = 55.85
Company Value = ∑ (3.37 / (1 + 3.55) ^ 5) = 15.65
Price = (Terminal Value + Company Value) / Count shares = (55.85 + 15.65) / 4771590000 = 14.98