PEGcomposite_net_income & Composite Opportunity Cost — PDD Case Study
Subject :
PEGcomposite_net_income & Composite Opportunity Cost — PDD Case Study
.
(A)
Gcomposite_net_income 🏀
= 100 × [ (1 + NetROIC × (1 - DₜₐₚPS/EPS) ÷ 100) ÷ (1 + CICCratio) - 1 ]
.
PEGcomposite_net_income 🏀
= P/E ÷ Gcomposite_net_income
.
Composite Opportunity Cost (relevant to PEGcomposite_net_income) 🏀
= Cost spent for a dollar worth of Opportunity relevant to Gcomposite_net_income
.
Case Study:
PDD
FY2025
Non-Gaap
.
ROA
= 17.03077631
.
NetROIC
= 25.5305840264
.
DₜₐₚPS
= Theoretical Acceptable Payable Dividend Per Share
= (1/(1+D/E)) × EPS × CICC/NetROIC
= USD 2.0475622232
.
Non-Gaap EPS
= USD 10.3507581966
.
CICCratio
= Clean Invested Capital Cost
= 0.0511587169
.
(A)
Gcomposite_net_income 🏀
= 100 × [ (1 + NetROIC × (1 - DₜₐₚPS/EPS) ÷ 100) ÷ (1 + CICCratio) - 1 ]
=
100 × ((1+25.5305840264×(1-2.0475622232÷10.3507581966) ÷ 100) ÷ (1+0.0511587169)-1)
= 14.6165493725 🏀
.
PEGcomposite_net_income 🏀
= P/E ÷ Gcomposite_net_income
= 95.73/10.3507581966 ÷ 14.6165493725
= 9.2485978497÷ 14.6165493725
= 0.6327483741 🏀
.
Composite Opportunity Cost (relevant to Gcomposite_net_income) 🏀
= Cost spent for a dollar worth of Opportunity relevant to Gcomposite_net_income
= 0.6327483741 spent for a dollar worth of Opportunity relevant to Gcomposite_net_income 🏀
.
That implies if FY2026 could achieve net income growth of 14.6165493725 and assuming the rest of the financial variables are unchanged, the current price tag USD 95.73 is with 36.72516259% discount in the composite sense.
.
In the Composite Sense, PDD worth USD 151.292368185 (14.6165493688×USD 10.3507581966).