Guanghui Energy (SHSE:600256) - Share price, News & Analysis

Q: What is the Fair Price of 600256 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

600256 (CN¥10.86) is trading below our estimate of [[fair value]] (CN¥45.21)

600256 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	6/6
Past Performance	5/6
Financial Health	4/6
Dividends	4/6

600256 Stock Overview

Guanghui Energy Co., Ltd. operates in the energy development business in China.

Rewards

Trading at 76% below our estimate of its fair value

Earnings are forecast to grow 40.55% per year

Earnings grew by 241.2% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Volatile share price over the past 3 months

Guanghui Energy Competitors

Shanxi Guoxin Energy

SHSE:600617

CN¥7.3b

China Merchants Energy Shipping

SHSE:601872

CN¥57.2b

Shanxi Lu'an Environmental Energy Development

SHSE:601699

CN¥42.5b

Shanxi Coking Coal Energy GroupLtd

SZSE:000983

CN¥49.9b

Price History & Performance

Summary of all time highs, changes and price drops for Guanghui Energy
Historical stock prices
Current Share Price	CN¥10.86
52 Week High	CN¥12.11
52 Week Low	CN¥4.50
Beta	0.19
1 Month Change	17.41%
3 Month Change	25.99%
1 Year Change	127.67%
3 Year Change	229.09%
5 Year Change	153.15%
Change since IPO	1,038.29%

Shareholder Returns

	600256	CN Oil and Gas	CN Market
7D	14.3%	9.0%	1.6%
1Y	127.7%	44.6%	-10.1%

Return vs Industry: 600256 exceeded the CN Oil and Gas industry which returned 44.6% over the past year.

Return vs Market: 600256 exceeded the CN Market which returned -10.1% over the past year.

Price Volatility

Is 600256's price volatile compared to industry and market?
600256 volatility
600256 Average Weekly Movement	8.5%
Oil and Gas Industry Average Movement	6.5%
Market Average Movement	6.0%
10% most volatile stocks in CN Market	9.2%
10% least volatile stocks in CN Market	3.9%

Stable Share Price: 600256 is more volatile than 75% of CN stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: 600256's weekly volatility (9%) has been stable over the past year, but is still higher than 75% of CN stocks.

About the Company

Founded	Employees	CEO	Website
1994	5,999	Jun Yan	https://www.xjguanghui.com

Guanghui Energy Co., Ltd. operates in the energy development business in China. Its principal products include coal, LNG, coal tar, alcohol ether, and petroleum. The company focuses on natural gas liquefaction, coal mining, coal chemical conversion, and oil and gas exploration and development activities, as well as energy logistics services.

Guanghui Energy Fundamentals Summary

How do Guanghui Energy's earnings and revenue compare to its market cap?
600256 fundamental statistics
Market Cap	CN¥70.76b
Earnings (TTM)	CN¥6.41b
Revenue (TTM)	CN¥28.74b

11.0x

P/E Ratio

2.5x

P/S Ratio

Is 600256 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
600256 income statement (TTM)
Revenue	CN¥28.74b
Cost of Revenue	CN¥17.59b
Gross Profit	CN¥11.15b
Other Expenses	CN¥4.73b
Earnings	CN¥6.41b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.98
Gross Margin	38.79%
Net Profit Margin	22.32%
Debt/Equity Ratio	105.0%

How did 600256 perform over the long term?

See historical performance and comparison

Dividends

3.7%

Current Dividend Yield

40%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 600256 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 600256?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 600256. This is calculated by dividing 600256's market cap by their current preferred multiple.
What is 600256's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥70.76b

600256 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.2x
Enterprise Value/EBITDA	8.1x
PEG Ratio	0.3x

Price to Earnings Ratio vs Peers

How does 600256's PE Ratio compare to its peers?

600256 PE Ratio vs Peers

The above table shows the PE ratio for 600256 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	26.9x
600617 Shanxi Guoxin Energy	82.5x	n/a	CN¥7.3b
601872 China Merchants Energy Shipping	13.2x	10.3%	CN¥57.2b
601699 Shanxi Lu'an Environmental Energy Development	5.6x	8.4%	CN¥42.5b
000983 Shanxi Coking Coal Energy GroupLtd	6.3x	2.7%	CN¥49.9b
600256 Guanghui Energy	11x	40.6%	CN¥70.8b

Price-To-Earnings vs Peers: 600256 is good value based on its Price-To-Earnings Ratio (11x) compared to the peer average (26.9x).

Price to Earnings Ratio vs Industry

How does 600256's PE Ratio compare vs other companies in the CN Oil and Gas Industry?

Price-To-Earnings vs Industry: 600256 is good value based on its Price-To-Earnings Ratio (11x) compared to the CN Oil and Gas industry average (13.1x)

Price to Earnings Ratio vs Fair Ratio

What is 600256's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

600256 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11x
Fair PE Ratio	22.6x

Price-To-Earnings vs Fair Ratio: 600256 is good value based on its Price-To-Earnings Ratio (11x) compared to the estimated Fair Price-To-Earnings Ratio (22.6x).

Share Price vs Fair Value

What is the Fair Price of 600256 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 600256 (CN¥10.86) is trading below our estimate of fair value (CN¥45.21)

Significantly Below Fair Value: 600256 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Guanghui Energy forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

6/6

Future Growth Score 6/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

40.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 600256's forecast earnings growth (40.6% per year) is above the savings rate (3.2%).

Earnings vs Market: 600256's earnings (40.6% per year) are forecast to grow faster than the CN market (24.5% per year).

High Growth Earnings: 600256's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 600256's revenue (36.6% per year) is forecast to grow faster than the CN market (17.7% per year).

High Growth Revenue: 600256's revenue (36.6% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 600256's Return on Equity is forecast to be high in 3 years time (36.5%)

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Past Performance

How has Guanghui Energy performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

40.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 600256 has high quality earnings.

Growing Profit Margin: 600256's current net profit margins (22.3%) are higher than last year (10.7%).

Past Earnings Growth Analysis

Earnings Trend: 600256's earnings have grown significantly by 40% per year over the past 5 years.

Accelerating Growth: 600256's earnings growth over the past year (241.2%) exceeds its 5-year average (40% per year).

Earnings vs Industry: 600256 earnings growth over the past year (241.2%) exceeded the Oil and Gas industry 55.4%.

Return on Equity

High ROE: Whilst 600256's Return on Equity (27.08%) is high, this metric is skewed due to their high level of debt.

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Financial Health

How is Guanghui Energy's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 600256's short term assets (CN¥14.3B) do not cover its short term liabilities (CN¥27.3B).

Long Term Liabilities: 600256's short term assets (CN¥14.3B) exceed its long term liabilities (CN¥12.4B).

Debt to Equity History and Analysis

Debt Level: 600256's net debt to equity ratio (79.2%) is considered high.

Reducing Debt: 600256's debt to equity ratio has reduced from 167.6% to 105% over the past 5 years.

Debt Coverage: 600256's debt is well covered by operating cash flow (26.8%).

Interest Coverage: 600256's interest payments on its debt are well covered by EBIT (7.9x coverage).

Balance Sheet

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Dividend

What is Guanghui Energy current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

3.68%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 600256's dividend (3.68%) is higher than the bottom 25% of dividend payers in the CN market (0.45%).

High Dividend: 600256's dividend (3.68%) is in the top 25% of dividend payers in the CN market (1.88%)

Stability and Growth of Payments

Stable Dividend: 600256 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 600256's dividend payments have increased, but the company has only paid a dividend for 9 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (40.3%), 600256's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (62.7%), 600256's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.2yrs

Average management tenure

CEO

Jun Yan (56 yo)

Tenure

CN¥620,800

Compensation

Mr. Jun Yan is General Manager & Director of Guanghui Energy Co., Ltd. from August 23, 2021.

Leadership Team

Experienced Management: 600256's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.

Board Members

Experienced Board: 600256's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/13 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31