What is the Precise Respective P When P/E = G + DY & P/E = NetROIC + DY? — PDD Case Study
Subject : What is the Precise Respective P When P/E = G + DY & P/E = NetROIC + DY? — PDD Case Study
.
(A)
PEGY = 1
P/E = G + DY
.
P
= √( [50 × G_Ratio × EPS]^2 + 100 × EPS × DPS ) + 50 × G_Ratio × EPS
.
(B)
PENetROICY = 1
P/E = NetROIC + DY
.
P
= √( [50 × NetROIC_Ratio × EPS]^2 + 100 × EPS × DPS ) + 50 × NetROIC_Ratio × EPS
.
Case Study
.
PDD
FY2025 Non-Gaap
.
EPS (Non-Gaap, Diluted)
= USD 10.3507581966
.
DPS (Non-Gaap, Diluted)
= Theoretical Affordable Payable Dividends
= Dₜₐₚ
= USD 2.0475622232
.
Non-Gaap NetROIC
= 25.5305840264
.
PENetROICY = 1
P/E = NetROIC + DY
.
P
= √( [50 × NetROIC_Ratio × EPS]^2 + 100 × EPS × DₜₐₚPS ) + 50 × NetROIC_Ratio × EPS
= √( [50 × 0.255305840264 × 10.3507581966]^2 + 100 × 10.3507581966 × 2.0475622232 ) + 50 × 0.255305840264 × 10.3507581966
= USD 272.0512793066
.
At USD 272.0512793066 :
(I)
P/E
= 272.0512793066 ÷ 10.3507581966
= 26.283222363
&
(II)
NetROIC + DₜₐₚY (%)
= 25.5305840264 + (100 × 2.0475622232/272.0512793066)
= 25.5305840264 + 0.7526383366
= 26.283222363
.
(III)
P/E
= NetROIC + DₜₐₚY (%)
= 26.283222363
.
Remarks :
(I)
DₜₐₚPS = Theoretical Affordable Payable Dividend Per Share
.
(II)
DₜₐₚPS ≠ D₀PS (Actual Distributed Dividend Per Share)
.
(III)
Usually :
DₜₐₚPS < D₀PS