In this article we are going to estimate the intrinsic value of Chanjet Information Technology Company Limited (HKG:1588) by taking the expected future cash flows and discounting them to today’s value. I will use the Discounted Cash Flow (DCF) model. It may sound complicated, but actually it is quite simple!
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.
What’s the estimated valuation?
As Chanjet Information Technology operates in the software sector, we need to calculate the intrinsic value slightly differently. In this approach dividends per share (DPS) are used, as free cash flow is difficult to estimate