Discounted Cash Flow (DCF) Analysis Unlevered

HSBC Holdings plc (HSBC)

$34.13

-0.16 (-0.47%)

All numbers are in Millions, Currency in USD

Stock DCF: 127.44 | 34.13 | undervalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	63,796	70,861	62,883	63,644	67,013	68,071.70	69,147.13	70,239.55	71,349.23	72,476.44
Revenue (%)
EBITDA	39,645	46,774	27,326	32,115	43,215	39,012.53	39,628.87	40,254.94	40,890.91	41,536.92
EBITDA (%)
EBIT	37,712	36,255	22,085	27,829	39,342	33,740.67	34,273.72	34,815.19	35,365.22	35,923.93
EBIT (%)
Depreciation	1,933	10,519	5,241	4,286	3,873	5,271.86	5,355.15	5,439.75	5,525.69	5,612.99
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	182,383	173,885	328,726	422,437	350,051	304,980.90	309,799.13	314,693.49	319,665.17	324,715.39
Total Cash (%)
Account Receivables	18,338	19,255	10,278	15,330.21	16,141.71	16,396.73	16,655.77	16,918.91	17,186.20	17,457.72
Account Receivables (%)
Inventories	-	-	-	-	-	-	-	-	-	-
Inventories (%)
Accounts Payable	-	-	-	-	-	-	-	-	-	-
Accounts Payable (%)
Capital Expenditure	-3,044	-3,632	-3,510	-3,565	-4,410	-3,765.87	-3,825.37	-3,885.80	-3,947.19	-4,009.55
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 34.13
Beta	0.617
Diluted Shares Outstanding	4,060.40
Cost of Debt
Tax Rate	8.52
After-tax Cost of Debt	10.05%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.406
Total Debt	204,239
Total Equity	138,581.45
Total Capital	342,820.45
Debt Weighting	59.58
Equity Weighting	40.42
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	63,796	70,861	62,883	63,644	67,013	68,071.70	69,147.13	70,239.55	71,349.23	72,476.44
EBITDA	39,645	46,774	27,326	32,115	43,215	39,012.53	39,628.87	40,254.94	40,890.91	41,536.92
EBIT	37,712	36,255	22,085	27,829	39,342	33,740.67	34,273.72	34,815.19	35,365.22	35,923.93
Tax Rate	30.99%	44.68%	40.42%	26.39%	8.52%	30.20%	30.20%	30.20%	30.20%	30.20%
EBIAT	26,026.78	20,054.74	13,157.40	20,485.36	35,990.93	23,551	23,923.07	24,301.02	24,684.94	25,074.93
Depreciation	1,933	10,519	5,241	4,286	3,873	5,271.86	5,355.15	5,439.75	5,525.69	5,612.99
Accounts Receivable	-	-917	8,977	-5,052.21	-811.51	-255.01	-259.04	-263.14	-267.29	-271.52
Inventories	-	-	-	-	-	-	-	-	-	-
Accounts Payable	-	-	-	-	-	-	-	-	-	-
Capital Expenditure	-3,044	-3,632	-3,510	-3,565	-4,410	-3,765.87	-3,825.37	-3,885.80	-3,947.19	-4,009.55
UFCF	24,915.78	26,024.74	23,865.40	16,154.15	34,642.42	24,801.98	25,193.81	25,591.84	25,996.15	26,406.85
WACC
PV UFCF						22,842.13	21,369.49	19,991.80	18,702.93	17,497.15
SUM PV UFCF										100,403.51

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	8.58
Free cash flow (t + 1)	26,934.99
Terminal Value	409,346.31
Present Value of Terminal Value	271,232.48

Intrinsic Value

Enterprise Value	371,635.99
Net Debt	-145,812
Equity Value	517,447.99
Shares Outstanding	4,060.40
Equity Value Per Share	127.44