A Look At The Fair Value Of 111, Inc. (NASDAQ:YI)

Simply Wall St.09-09

Key Insights The projected fair value for 111 is US$0.75 based on 2 Stage Free Cash Flow to Equity 111's US$0.68 share price indicates it is trading at similar levels as its fair value estimate ...

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(NASDAQ:YI)","media":"Simply Wall St.","content":"<div>\n<p>Key Insights\n\n The projected fair value for 111 is US$0.75 based on 2 Stage Free Cash Flow to Equity \n 111's US$0.68 share price indicates it is trading at similar levels as its fair value estimate \n\n...</p>\n\n<a href=\"https://finance.yahoo.com/news/look-fair-value-111-inc-130444983.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>A Look At The Fair Value Of 111, Inc. (NASDAQ:YI)</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nA Look At The Fair Value Of 111, Inc. (NASDAQ:YI)\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-09 21:04 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/look-fair-value-111-inc-130444983.html><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Key Insights\n\n The projected fair value for 111 is US$0.75 based on 2 Stage Free Cash Flow to Equity \n 111's US$0.68 share price indicates it is trading at similar levels as its fair value estimate \n\n...</p>\n\n<a href=\"https://finance.yahoo.com/news/look-fair-value-111-inc-130444983.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TV","symbol_name":"墨西哥电视","start_time":0,"source_url":"https://finance.yahoo.com/news/look-fair-value-111-inc-130444983.html","article_id":"2466993193","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/FlH61HAvmcAhcHGMkBEvcg--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/71f34581b54368cb6e2f3e669b7e27e1"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2466993193","pubTimestamp":1725887084,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"The projected fair value for 111 is US$0.75 based on 2 Stage Free Cash Flow to Equity. Today we'll do a simple run through of a valuation method used to estimate the attractiveness of 111, Inc.  as an investment opportunity by taking the expected future cash flows and discounting them to today's value. We will use the Discounted Cash Flow  model on this occasion. Before you think you won't be able to understand it, just read on!Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"TV":"墨西哥电视","QLD":"纳指两倍做多ETF","FCF":"第一联邦金融","BK4211":"区域性银行","TQQQ":"纳指三倍做多ETF","BK4585":"ETF&股票定投概念","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","PSQ":"纳指反向ETF","BK4128":"药品零售","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","BK4503":"景林资产持仓","BK4100":"有线和卫星",".IXIC":"NASDAQ Composite","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC","BK4588":"碎股","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","YI":"1药网","QID":"纳指两倍做空ETF","NDAQ":"纳斯达克OMX交易所","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC","BK4112":"金融交易所和数据","SQQQ":"纳指三倍做空ETF","IQ":"爱奇艺"},"translate_title":"111，Inc.（纳斯达克：YI）的公允价值一览","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"YI":1,"TV":1,"DCF":1,"FCF":1,"NDAQ":1,".IXIC":1,"IQ":1,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"Key Insights\n\n The projected fair value for 111 is US$0.75 based on 2 Stage Free Cash Flow to Equity \n 111's US$0.68 share price indicates it is trading at similar levels as its fair value estimate \n\n Today we'll do a simple run through of a valuation method used to estimate the attractiveness of 111, Inc. (NASDAQ:YI) as an investment opportunity by taking the expected future cash flows and discounting them to today's value. We will use the Discounted Cash Flow (DCF) model on this occasion. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. \n Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model. \n Check out our latest analysis for 111 \n Is 111 Fairly Valued? \n We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. \n Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: \n 10-year free cash flow (FCF) estimate \n\n\n\n\n2025\n2026\n2027\n2028\n2029\n2030\n2031\n2032\n2033\n2034\n\n\n Levered FCF (CN¥, Millions) \nCN¥6.15m\nCN¥9.36m\nCN¥12.8m\nCN¥16.3m\nCN¥19.5m\nCN¥22.3m\nCN¥24.7m\nCN¥26.8m\nCN¥28.5m\nCN¥30.0m\n\n\nGrowth Rate Estimate Source\nEst @ 73.38%\nEst @ 52.12%\nEst @ 37.23%\nEst @ 26.81%\nEst @ 19.52%\nEst @ 14.41%\nEst @ 10.84%\nEst @ 8.34%\nEst @ 6.59%\nEst @ 5.36%\n\n\n Present Value (CN¥, Millions) Discounted @ 7.2% \nCN¥5.7\nCN¥8.2\nCN¥10.4\nCN¥12.4\nCN¥13.8\nCN¥14.7\nCN¥15.2\nCN¥15.4\nCN¥15.3\nCN¥15.1\n\n\n\n(\"Est\" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = CN¥126m\n The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.5%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.2%. \nTerminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = CN¥30m× (1 + 2.5%) ÷ (7.2%– 2.5%) = CN¥662m\nPresent Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥662m÷ ( 1 + 7.2%)10= CN¥332m\n The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is CN¥458m. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of US$0.7, the company appears about fair value at a 9.4% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. \n\n\n\n  NasdaqGM:YI Discounted Cash Flow September 9th 2024\n \n\n Important Assumptions \n Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at 111 as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.2%, which is based on a levered beta of 0.934. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. \n Moving On: \n Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For 111, there are three additional aspects you should further research: \n\n Risks: Every company has them, and we've spotted   1 warning sign for 111   you should know about. \nFuture Earnings: How does YI's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.\n Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! \n\n PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here.\nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2466993193"}