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Industrial & Infrastructure Fund Investment (TSE:3249) Earnings Power Value (EPV) : 円-193,914.37 (As of Jul24)


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What is Industrial & Infrastructure Fund Investment Earnings Power Value (EPV)?

As of Jul24, Industrial & Infrastructure Fund Investment's earnings power value is 円-193,914.37. *

* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.

Margin of Safety is N/A.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future. Assumption: Current profitability is sustainable.


Industrial & Infrastructure Fund Investment Earnings Power Value (EPV) Historical Data

The historical data trend for Industrial & Infrastructure Fund Investment's Earnings Power Value (EPV) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Industrial & Infrastructure Fund Investment Earnings Power Value (EPV) Chart

Industrial & Infrastructure Fund Investment Annual Data
Trend Dec15 Dec16 Jul17 Jul18 Jul19 Jul20 Jul21 Jul22 Jul23 Jul24
Earnings Power Value (EPV)
Get a 7-Day Free Trial Premium Member Only Premium Member Only -113,861.00 -149,531.00 -132,500.00 -98,655.30 -193,914.00

Industrial & Infrastructure Fund Investment Semi-Annual Data
Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jan18 Jul18 Jan19 Jul19 Jan20 Jul20 Jan21 Jul21 Jan22 Jul22 Jan23 Jul23 Jan24 Jul24
Earnings Power Value (EPV) Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -132,500.00 - -98,655.30 - -193,914.00

Competitive Comparison of Industrial & Infrastructure Fund Investment's Earnings Power Value (EPV)

For the REIT - Diversified subindustry, Industrial & Infrastructure Fund Investment's Earnings Power Value (EPV), along with its competitors' market caps and Earnings Power Value (EPV) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Industrial & Infrastructure Fund Investment's Earnings Power Value (EPV) Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Industrial & Infrastructure Fund Investment's Earnings Power Value (EPV) distribution charts can be found below:

* The bar in red indicates where Industrial & Infrastructure Fund Investment's Earnings Power Value (EPV) falls into.



Industrial & Infrastructure Fund Investment Earnings Power Value (EPV) Calculation

Earnings Power Value also known as just Earnings Power is a valuation technique popularised by Bruce Greenwald, an authority on value investing at Columbia University. It is arguably a better way to analyze stocks than Discounted Cash Flow analysis that relies on highly speculative growth assumptions many years into the future.

The basic concept of EPV is that one should value a stock based on the current free cash flow of a company and not on future projections which may, or may not, come true. This valuation tool excludes the potential growth that a company may have so that needs to be looked at separately. Since future growth is excluded from the analysis, only the maintenance capital expenditures are subtracted from after-tax EBIT (earnings before interest and taxes) and growth capex is ignored.

Industrial & Infrastructure Fund Investment's "Earning Power" Calculation:

Average of Last 5 Years Last Year
Revenue 31,998
DDA 4,158
Operating Margin % 48.29
SGA * 25% 645
Tax Rate % 0.02
Maintenance Capex 33,008
Cash and Cash Equivalents 25,581
Short-Term Debt 33,800
Long-Term Debt 248,483
Shares Outstanding (Diluted) 2

1. Start with "Earnings" not including accounting adjustments (one-time charges not excluded unless policy has changed). "Earnings" are "Operating Income.

2. Look at average margins over a business/Industry cycle: Average Operating Margin = 48.29%

To normalize margins and eliminate the effects on profitability of valuing the firm at different points in the business cycle, it is usually best to take a long-term average of operating margins. Ideally this would be as long as 10 years and include at least one economic downturn. However, since most of companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year margin.

3. Multiply average margins by sustainable revenues and then adjust for maintenance SGA. This yields "normalized" EBIT:

To be conservative, GuruFocus uses an average of the 5 year revenues as the sustainable revenue.
EPV analysis recognises that part of SG&A expenditure is made to maintain and replace the existing assets, while part is made to grow sales. Since EPV is only interested in what it costs a going concern to maintain its existing asset base, it adds back a percentage of SG&A (between 15% and 50% - this is a matter of judgment and industry knowledge) to make up for the fact that some of this expenditure went to fund growth and shouldn't be accounted for. To start off, we assume 25% for the sake of prudence.
Sustainable Revenue = 円31,998 Mil, Average Operating Margin = 48.29%, Average Adjusted SGA = 645,
therefore "Normalized" EBIT = Sustainable Revenue * Average Operating Margin + Average Adjusted SGA = 31,998 * 48.29% +645 = 円16096.003922592 Mil.

4. Multiply by one minus Average Tax Rate (NOPAT):

Same as average operating margin calculation, GuruFocus takes an average of the 5 years tax rates.
Average Tax Rate = 0.02%, and "Normalized" EBIT = 円16096.003922592 Mil,
therefore After-tax "Normalized" EBIT = "Normalized" EBIT * ( 1 - Average Tax Rate ) = 16096.003922592 * ( 1 - 0.02% ) = 円16092.462801729 Mil.

5. Add back Excess Depreciation (after tax at 1/2 average tax rate). This yields "normalized" Earnings:

Excess Depreciation = Average DDA * % of Excess Depreciation (after tax at 1/2 average tax rate) = 4,158 * 0.5 * 0.02% = 円0.45741487 Mil.
"Normalized" Earnings = After-tax "Normalized" EBIT + Excess Depreciation = 16092.462801729 + 0.45741487 = 円16092.920216599 Mil.

6. Adjusted for Maintenance Capital Expenditure:

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Third, calculate Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - percentage of Net PPE as of corresponding Revenue * revenue increase.
Fourth, GuruFocus uses an average of the 5 year maintenance capital expenditures as maintenance CAPEX.
Industrial & Infrastructure Fund Investment's Average Maintenance CAPEX = 円33,008 Mil *.
* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.

7. Investors require a return of "WACC" for the risk they are taking: WACC = 9%

8. Industrial & Infrastructure Fund Investment's current cash and cash equivalent = 円25,581 Mil.
Industrial & Infrastructure Fund Investment's current interest bearing debt = Long-Term Debt & Capital Lease Obligation + Short-Term Debt & Capital Lease Obligation = 248,483 + 33,800 = 円282283 Mil.
Industrial & Infrastructure Fund Investment's current Shares Outstanding (Diluted Average) = 2 Mil.

Industrial & Infrastructure Fund Investment's Earnings Power Value (EPV) for Jul24 is calculated as:

EPV = ( ( Norm. Earnings-Maint. CAPEX *) / WACC + CashandEquiv - Int. Bearing Debt ) / Shares Outstanding (Diluted Average)
= ( ( 16092.920216599 - 33,008)/ 9%+25,581-282283 )/2
=-193,914.37

Margin of Safety (EPV)=( Earnings Power Value (EPV)-Current Price )/Earnings Power Value (EPV)
=( -193914.37250279-112200.00 )/-193914.37250279
= N/A

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* GuruFocus does not store EPV value into our database if Average Maintenance CAPEX is 0.


Industrial & Infrastructure Fund Investment  (TSE:3249) Earnings Power Value (EPV) Explanation

Assumption: Current profitability is sustainable.

Earnings power value (EPV) uses a very basic equation which assumes no growth, although it does rely on an assumption about the cost of capital as well as the fact that current earnings are sustainable. It also involves several adjustments to clean up the underlying Earnings figures.


Be Aware

Though using today's earnings in calculating Earnings Power Value, GuruFocus is normalizing these earnings to the business cycle. This eliminates the effects on profitability of valuing the firm at different points in the business cycle. This means that we are considering the average earnings over 5 years.


Industrial & Infrastructure Fund Investment Earnings Power Value (EPV) Related Terms

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Industrial & Infrastructure Fund Investment Business Description

Traded in Other Exchanges
N/A
Address
2-7-3 Marunouchi, Chiyoda-ku, Tockyo, JPN, 100-6420
Industrial & Infrastructure Fund Investment Corp is a Japan based real estate investment trust. It owns and operates real estate properties. The company is focused on acquiring and operating industrial and infrastructure properties in Japan. It intends to invest in a diverse portfolio of properties including manufacturing, research and development facilities. The firm's properties are located mainly in Nagoya area, Osaka area and Tokyo area and other major cities.

Industrial & Infrastructure Fund Investment Headlines

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