Discounted Cash Flow
The9 Ltd. ADR
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Audit / VIE / HFCA: Chinese ADR (VIE contractual structure, HFCA Act): the PCAOB must inspect the China-based auditor (e.g. Deloitte/EY China) or the ADRs can be delisted; dividends must be repatriated through the WFOE/VIE and can be blocked. The audit relies on contractual VIE control, not equity, adding structural risk. Financial-sector DCF: free cash flow for lenders/insurers includes loan principal and deposits, so FCF ≈ 5-10× net income and is not a valuation proxy; the model shows moderate/unstable predictability and the DCF can be 5-40× market cap (lender pattern).
Sourced live via DEF 14A beneficial_ownership (edgartools proxy) for US filers and 20-F risk_factors (“controls X% of voting power” + VIE/HFCA) for foreign ADRs — cached 12h. A concentrated holder can overrule the DCF’s minority-basis assumptions on dividends, issuance, and delisting.
Average annual growth rates
| Metric | 10-Year | 5-Year | 3-Year |
|---|---|---|---|
| Sales | — | — | — |
| Free Cash Flow | — | — | — |
| Average (FCF & NI) | — | — | — |
| Net Income | — | — | — |
| Dividends | — | — | — |
Endpoint CAGR (better for long term trend)
| Metric | 10-Year | 5-Year | 3-Year |
|---|---|---|---|
| Sales | — | — | — |
| Free Cash Flow | — | — | — |
| Average (FCF & NI) | — | — | — |
| Net Income | — | — | — |
Projected growth rate
—
Historical inputs (10 fiscal years)
| YEAR | Sales | Net Income | Free Cash Flow | Net Margin | EPS (diluted) |
|---|---|---|---|---|---|
| 2016 | $1.2m | $-14.5m | $-27.0m | -1202.2% | $-28.34 |
| 2017 | $1.7m (38.8%) | $-4.0m (72.4%) | $-12.9m (52.1%) | -239.4% (80.1%) | $-0.81 (97.1%) |
| 2018 | $379.3k (-77.4%) | $-4.7m (-17.2%) | $-2.2m (83.0%) | -1241.1% (-418.3%) | $-4.15 (-412.3%) |
| 2019 | $7.3k (-98.1%) | $-3.8m (19.1%) | $-1.2m (47.1%) | -52063.4% (-4095.0%) | $-1.79 (56.9%) |
| 2020 | $14.3k (95.4%) | $9.1m (338.8%) | $-2.4m (-109.3%) | 63611.8% (222.2%) | $2.42 (235.2%) |
| 2021 | $3.2m (22142.6%) | $-9.6m (-205.8%) | $-16.1m (-562.7%) | -302.7% (-100.5%) | $-0.13 (-105.4%) |
| 2022 | $2.6m (-19.2%) | $-21.1m (-119.0%) | $-60.1m (-273.3%) | -820.0% (-170.9%) | $-0.20 (-53.8%) |
| 2023 | $25.9m (909.7%) | $420.0k (102.0%) | $420.0k (100.7%) | 1.6% (100.2%) | $0.02 (110.0%) |
| 2024 | $16.7m (-35.8%) | $-1.5m (-457.0%) | $-9.3m (-2307.6%) | -9.0% (-656.2%) | $-0.01 (-150.0%) |
| 2025 | $16.1m (-3.4%) | $-60.0m (-3900.9%) | $-6.5m (29.7%) | -373.0% (-4042.4%) | $-0.03 (-200.0%) |
Base FCF: — (latest fiscal year)
Discount rate: % —
Terminal growth: —
Projection period: — years
Alt A decline yrs:
Alt B total yrs:
SEC filings report in CNY. Values above are converted to USD for comparison with the US-listed share price.
Projected cash flows
| Year | Projected cash flow | Discount Factor | Present Value |
|---|
PV of projected FCF: —
Terminal FCF: —
Terminal value: —
PV of terminal value: —
Enterprise value (DCF): —
Net debt deduction: —
Current price: —
—Alternative DCF Models
| Model | Fair Value | Upside | PV(FCFs) | PV(Terminal) | Total Years |
|---|---|---|---|---|---|
| Standard (10yr→TV) | — | — | — | — | 10 + TV |
| Alt A (Gradual Decline) | — | — | — | — | — |
| Alt B (30yr Hard Stop) | — | — | — | N/A | — |
This is a simplified DCF model for illustration. It uses reported free cash flow, a single growth assumption, fixed WACC, and a Gordon Growth terminal value. It is not investment advice.