HTHT
H World Group Limited
$40.47
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 53.4% below fair value
You pay
$40.47
Bear
$53.45
Fair
$86.78
Bull
$123.25
Bear
$53.45
+32.1%
9% stage 1 growth, 11% discount
Fair
$86.78
+114.4%
14% stage 1 growth, 11% discount
Bull
$123.25
+204.5%
19% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
14.3x
Market is pricing in (growth)
4.4%
vs 14.3% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $62.40 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $86.78 per share.
Warnings
Wall Street's average price target is $62.40 (from 19 analysts). Our estimate is 52% above the consensus -- consider that gap carefully.
Financial statements were converted from CNY into USD using USDCNY at 0.1479 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