Report: Canaan Technology's intrinsic value is $2.21, and its stock price is overvalued by 30%

According to BlockBeats, Standard Consensus released the "Canaan Creative Research Report" today, which gave Canaan Technology a target price of $2.21. It is understood that the current share price of Canaan Technology (NASDAQ trading code CAN) is $2.88, which is 30% higher than the estimated price in the report.
The report gives the calculation method of the target price:
1. Discounted Cash Flow Analysis (DCF): Based on a weighted average cost of capital of 4.355%, an operating income growth rate of 10%, and a long-term growth rate of 3.5%, we estimate Canaan's intrinsic value to be 2.11.
2. Comparative analysis of similar companies (Comps): After analyzing the basic situation, we concluded that, assuming the stock price is discounted at 25% percentile P/E and P/TBV, we estimate the intrinsic value of Canaan Creative to be 2.315.
Total value calculation: Weighting the two analysis methods at 60% (DCF) and 40% (Comps) respectively, the final target price is 2.21. We looked at the implied value based on the 25th percentile P/E and P/TBV multiples. The implied stock price calculated based on the P/TBV multiple is 1.87, and the median calculated based on the P/E multiple is 2.76. Our target price of 2.21 is almost exactly between these two numbers.
In addition, the report analyzes that the risk of Canaan Inc. lies in the net cash flow loss: in the year ending December 31, 2018, Canaan's operating cash flow was RMB 12.7 million (US$1.8 million), and in the nine months ending September 30, 2019, it suffered a net loss of RMB 236.3 million (US$33.1 million). Canaan may not be able to maintain or improve its profitability in the long term. The inability to generate positive cash flow from operating activities will greatly affect financing costs.
The report also believes that Canaan Technology may experience a small decline in the future, and the downward trend will be highly correlated with the BTC price.

Lvdong learned that Canaan Technology, a high-performance computing chip company, was officially listed on the Nasdaq with the trading code "CAN" on the evening of November 21, Beijing time. The issue price was US$9 per share and the amount of funds raised reached US$90 million.

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