Subject : PDD’s Discounted EPS ROIC_CICC Value

.

In the previous workout, we have computed PDD’s Discounted EPS ROA_CTAC Value which is conservative relatively.

.

What is the PDD’s Discounted EPS ROIC_CICC Value?

.

PDD

FY2025 (12 months)

.

Non-Gaap EPS = USD 10.3507581966

ROIC = 25.5305840264

CICC Factor = 1.0511587169

CICC = 5.11587169

.

(A)

PDD’s ATC’s Discounted EPS ROIC_CICC Value

=

Front Runway Period Value

+

Rear Runway Period Value

=

EPS × CICC

+

EPS × (1÷CICC Factor)×(1-(1÷CICC Factor)^(roic-cicc))÷(1-1÷CICC Factor)

=

10.3507581966×5.11587169

+

10.3507581966×(1÷1.0511587169)×(1-(1÷1.0511587169)^(25.5305840264-5.11587169))÷(1-1÷1.0511587169)

= 52.953150828 + 129.2628813874

= USD 182.2160322154

.

(B)

Injecting Terminal Growth 2.5% to the Front Period Value formula, we have :

.

Front Runway Period Growth

= Survival Growth + Terminal Growth

= CICC + Terminal Growth

= 5.11587169% + 2.5%

= 7.61587169%

.

PDD’s ATC’s Discounted EPS ROIC_CICC Value

=

Front Runway Period Value

+

Rear Runway Period Value

=

EPS × (1.0761587169÷CICC Factor)×(1-(1.0761587169÷CICC Factor)^(roic-cicc))÷(1-1.0761587169÷CICC Factor)

+

EPS × (1÷CICC Factor)×(1-(1÷CICC Factor)^(roic-cicc))÷(1-1÷CICC Factor)

= 10.3507581966×(1.0761587169÷1.0511587169)×(1-(1.0761587169÷1.0511587169)^5.11587169)÷(1-1.0761587169÷1.0511587169)

+ 10.3507581966×(1÷1.0511587169)×(1-(1÷1.0511587169)^(25.5305840264-5.11587169))÷(1-1÷1.0511587169)

=

56.9323273873

+

129.2628813874

= USD 186.1952087747

.

(C)

Using Mauboussin’s Fade Model

then,

.

PDD’s Mauboussin’s Fade Model Value (Fade Ratio 0 = 0% Faded)

=

(10.3507581966×(1-0.025÷0.2553058403)÷(0.0511587169-0.025)-10.3507581966÷0.0511587169)

×

((1-0)×(0.0511587169-0.025)÷((1+0.0511587169)-(1-0)×(1+0.025)))

+

10.3507581966÷0.0511587169

= 154.6174852896 + 202.3263839246

= USD 356.9438692142

.

(D)

PDD’s Mauboussin’s Fade Model Value (Fade Ratio 0.26 = 26% Faded)

=

(10.3507581966×(1-0.025÷0.2553058403)÷(0.0511587169-0.025)-10.3507581966÷0.0511587169)

×

((1-0.26)×(0.0511587169-0.025)÷((1+0.0511587169)-(1-0.26)×(1+0.025)))

+

10.3507581966÷0.0511587169

= 10.2269303664 + 202.3263839246

= USD 212.553314291

.

(E)

PDD’s Mauboussin’s Fade Model Value (Fade Ratio 0.50 = 50% Faded)

=

(10.3507581966×(1-0.025÷0.2553058403)÷(0.0511587169-0.025)-10.3507581966÷0.0511587169)

×

((1-0.50)×(0.0511587169-0.025)÷((1+0.0511587169)-(1-0.50)×(1+0.025)))

+

10.3507581966÷0.0511587169

=

3.7543205917 + 202.3263839246

= USD 206.0807045163

.

(F)

PDD’s Mauboussin’s Fade Model Value (Fade Ratio 1 = 100% Faded)

=

(10.3507581966×(1-0.025÷0.2553058403)÷(0.0511587169-0.025)-10.3507581966÷0.0511587169)

×

((1-1)×(0.0511587169-0.025)÷((1+0.0511587169)-(1-1)×(1+0.025)))

+

10.3507581966÷0.0511587169

= 0 + 10.3507581966÷0.0511587169

= 0 + 202.3263839246

= USD 202.3263839246

.

Fair Value Range (by Mauboussin’s Fade Model from Fade Rate 100% to Fade Rate 0%)

= USD 202.3263839246 to USD 356.9438692142

.

Reference :