Discounted Cash Flow (DCF) Analysis Levered

Cathay General Bancorp (CATY)

$44.36

+0.49 (+1.12%)

All numbers are in Millions, Currency in USD

Stock DCF: 104.45 | 44.36 | undervalue

Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	526.38	597.27	619.66	594.93	652.36	689.67	729.12	770.82	814.91	861.52
Revenue (%)
Operating Cash Flow	248.87	336.54	434.98	319.95	334.32	384.63	406.63	429.89	454.48	480.47
Operating Cash Flow (%)
Capital Expenditure	-3.19	-6.67	-7.13	-5.78	-3.73	-6.09	-6.44	-6.81	-7.20	-7.61
Capital Expenditure (%)
Free Cash Flow	245.69	329.87	427.85	314.18	330.59	378.54	400.19	423.08	447.28	472.86

Weighted Average Cost Of Capital

Share price	$ 44.36
Beta	1.167
Diluted Shares Outstanding	76.91
Cost of Debt
Tax Rate	21.88
After-tax Cost of Debt	27.83%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.356
Total Debt	192.97
Total Equity	3,411.94
Total Capital	3,604.92
Debt Weighting	5.35
Equity Weighting	94.65
Wacc

Build Up Free Cash Flow

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	526.38	597.27	619.66	594.93	652.36	689.67	729.12	770.82	814.91	861.52
Operating Cash Flow	248.87	336.54	434.98	319.95	334.32	384.63	406.63	429.89	454.48	480.47
Capital Expenditure	-3.19	-6.67	-7.13	-5.78	-3.73	-6.09	-6.44	-6.81	-7.20	-7.61
Free Cash Flow	245.69	329.87	427.85	314.18	330.59	378.54	400.19	423.08	447.28	472.86
WACC
PV LFCF						316.28	305.64	295.36	285.42	275.82
SUM PV LFCF										1,617.52

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.40
Free cash flow (t + 1)	482.32
Terminal Value	6,517.82
Present Value of Terminal Value	4,159.26

Intrinsic Value

Enterprise Value	5,776.78
Net Debt	-2,256.73
Equity Value	8,033.50
Shares Outstanding	76.91
Equity Value Per Share	104.45