CYD
China Yuchai International Limited
$45.45
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 66.2% below fair value
You pay
$45.45
Bear
$117.79
Fair
$134.49
Bull
$149.10
Bear
$117.79
+159.2%
3% stage 1 growth, 12% discount
Fair
$134.49
+195.9%
6% stage 1 growth, 12% discount
Bull
$149.10
+228.1%
7% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
31%
Implied Market Multiple
2.8x
Market is pricing in (growth)
-19.8%
vs 5.7% base
Summary
Using a two-stage FCF DCF with 6% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $134.49 per share.
Warnings
Financial statements were converted from CNY into USD using USDCNY at 0.1478 USD per CNY.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions