Intrinsic calculation example

1) Total EPS

Year	Year	EPS
1	2008	The average EPS growth rate is 10%,and the EPS in year 2008 is RM2.20
2	2009	RM2.20x1.1=2.42
3	2010	RM2.42,1.1=2.66
4	2011	RM2.66x1.1=2.93
5	2012	RM2.93x1.1=3.22
6	2013	RM3.22x1.1=3.54
7	2014	RM3.54x1.1=3.89
8	2015	RM3.89x1.1=4.28
9	2016	RM4.28x1.1=4.71
10	2017	RM4.71x1.1=5.18
	Total EPS	RM35.03

2) Let's say the average PE for the past 10 years is 13

Expected price in 2018   = RM5.18 x 13

                                        = RM67.34

3) Total dividends (for the ten years)

Total dividends    = Total EPS x Average dividend payout

                             = RM35.03 x 20%

                             = RM7.01

4) Total returns

Total returns,R  = Expected price in 11th year + total dividend

                          = RM67.34 + RM7.01

                          = RM74.35

5) Intrinsic value

Using equation R= ar^(n-1)

R = Total returns

a = Intrinsic value of the share

r = Growth rate, let's say 15%,hence 1.15

n = Year n, in this case, the 11th year, so n= 11

Intrinsic value of the share

R = ar^n-1

74.35     = a 1.15 ^11-1

a              = RM18.38

If the current stock price is RM13, so it is worth to BUY.

Anyway, this is just 1 of the method for stock valuation, you might refer to other method as well, happy trading:-)