thanks. Slide #30 helps a tad.
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There could be potential to open new villages to younger age groups by dropping minimum ages to 65, 60 or 55. The ORA system could be adapted for younger minimum age villages, including a shared capital gain/loss on disposal - Perhaps also a prepaid leasehold system for some villages?
Population forecast (Source: Stats NZ)
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2020 2028 2038 2048 2058 Population 65+ 792 1048 1315 1452 1695 Total population (in 000s) 5,002 5,511 6,087 6,592 7,061 65+ as % of total population 15.83% 19.02% 21.60% 22.03% 24.01%
How many will go to village units? and what would OCA's market share be in 10/20 years' time?
The problem with DCF valuation models, (if that's what you are attempting to build), is at least to some extent they rely on answers to questions like that where people make estimates, (total guesswork ?), about things far into the future.
All we know with some sense of certainty is that the retirement village model has been gaining growing acceptance and penetration rates have been going up steadily over time as have the number of old folks reaching the average age of late 70's when about 15% of them choose to move into an independent living unit and mid 80's is I believe the average age where people move into a care suite.
https://i.stuff.co.nz/life-style/hom...=facebook.post
Forecast average house price 10% down.
Brokers average $1.19....take off 10%....that bring OCA to $1...
Current SP .90c...cheapest n discounted at the sector
thanks & yes - all valuation models do require assumptions that you keep validating and adjusting over time. Number of units/residents/sales - and gross margin need constant tweaking every 6-months to reflect what is happening in reality.
Other parameters are slightly easy - interest rates, market premium, industry beta etc. to aid in pegging the cost of equity.
I'm building a model based on residual income and for the terminal value that DCF requires, book value is used instead.
If I have the time, I'd use all the models for the same set of parameters & compare the value.
Gee I just think they’re a good company for the long term and under priced compared to NTA, so buy some more whenever my chart says so. That’s close to philistinism compared to you analysts!
Thanks for sharing your analysis. 👨🏼*🎓😁
Disc: I'm neither an accountant nor an experienced analyst; as stated before, I'm developing my skills and feel comfortable in the RI model.
All I'm hoping to do is - prepare the model with a set of assumptions, await OCA's annual report to adjust some numbers, form a view on the valuation, visit a few OCA premises and then only buy. But this time around, I'll hold it for a few years (noted OCA is no RYM)