Ningxia Baofeng Energy Group (SHSE:600989) - Share price, News & Analysis

Q: What is the Fair Price of 600989 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

600989 (CN¥13.55) is trading below our estimate of [[fair value]] (CN¥33.75)

600989 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	6/6
Past Performance	4/6
Financial Health	4/6
Dividends	3/6

600989 Stock Overview

Ningxia Baofeng Energy Group Co., Ltd. produces, processes, and sells coal mining, washing, coking, coal tar, crude benzene, C4 deep-processed, methanol, and olefin products.

Rewards

Trading at 59.8% below our estimate of its fair value

Earnings are forecast to grow 33.87% per year

Earnings grew by 28.2% over the past year

Risk Analysis

High level of non-cash earnings

Dividend of 2.37% is not well covered by earnings

Ningxia Baofeng Energy Group Competitors

Zhejiang Xinan Chemical Industrial GroupLtd

SHSE:600596

CN¥22.1b

Anhui Jinhe IndustrialLtd

SZSE:002597

CN¥23.2b

Shandong Sinobioway Biomedicine

SZSE:002581

CN¥13.2b

Hoshine Silicon Industry

SHSE:603260

CN¥120.3b

Price History & Performance

Summary of all time highs, changes and price drops for Ningxia Baofeng Energy Group
Historical stock prices
Current Share Price	CN¥13.55
52 Week High	CN¥19.69
52 Week Low	CN¥11.98
Beta	0.59
1 Month Change	-3.90%
3 Month Change	-2.52%
1 Year Change	-18.67%
3 Year Change	32.97%
5 Year Change	n/a
Change since IPO	-15.37%

Shareholder Returns

	600989	CN Chemicals	CN Market
7D	0.7%	0.3%	-0.5%
1Y	-18.7%	-8.8%	-10.4%

Return vs Industry: 600989 underperformed the CN Chemicals industry which returned -8.8% over the past year.

Return vs Market: 600989 underperformed the CN Market which returned -10.4% over the past year.

Price Volatility

Is 600989's price volatile compared to industry and market?
600989 volatility
600989 Average Weekly Movement	4.7%
Chemicals Industry Average Movement	6.2%
Market Average Movement	6.1%
10% most volatile stocks in CN Market	9.2%
10% least volatile stocks in CN Market	3.9%

Stable Share Price: 600989 is less volatile than 75% of CN stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 600989's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2005	14,211	Yuanguan Liu	https://www.baofengenergy.com

Ningxia Baofeng Energy Group Co., Ltd. produces, processes, and sells coal mining, washing, coking, coal tar, crude benzene, C4 deep-processed, methanol, and olefin products. Its products include polyethylene, polypropylene, coke, benzene, asphalt, and MTBE.

Ningxia Baofeng Energy Group Fundamentals Summary

How do Ningxia Baofeng Energy Group's earnings and revenue compare to its market cap?
600989 fundamental statistics
Market Cap	CN¥99.10b
Earnings (TTM)	CN¥7.09b
Revenue (TTM)	CN¥24.84b

14.0x

P/E Ratio

4.0x

P/S Ratio

Is 600989 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
600989 income statement (TTM)
Revenue	CN¥24.84b
Cost of Revenue	CN¥15.04b
Gross Profit	CN¥9.80b
Other Expenses	CN¥2.71b
Earnings	CN¥7.09b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.97
Gross Margin	39.46%
Net Profit Margin	28.54%
Debt/Equity Ratio	24.7%

How did 600989 perform over the long term?

See historical performance and comparison

Dividends

2.4%

Current Dividend Yield

33%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 600989 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 600989?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 600989. This is calculated by dividing 600989's market cap by their current preferred multiple.
What is 600989's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥99.10b

600989 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	4.3x
Enterprise Value/EBITDA	10.5x
PEG Ratio	0.4x

Price to Earnings Ratio vs Peers

How does 600989's PE Ratio compare to its peers?

600989 PE Ratio vs Peers

The above table shows the PE ratio for 600989 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	22.1x
600596 Zhejiang Xinan Chemical Industrial GroupLtd	6.1x	1.2%	CN¥22.1b
002597 Anhui Jinhe IndustrialLtd	16.5x	11.9%	CN¥23.2b
002581 Shandong Sinobioway Biomedicine	53x	n/a	CN¥13.2b
603260 Hoshine Silicon Industry	12.9x	7.4%	CN¥120.3b
600989 Ningxia Baofeng Energy Group	14x	33.9%	CN¥99.1b

Price-To-Earnings vs Peers: 600989 is good value based on its Price-To-Earnings Ratio (14x) compared to the peer average (22.1x).

Price to Earnings Ratio vs Industry

How does 600989's PE Ratio compare vs other companies in the CN Chemicals Industry?

Price-To-Earnings vs Industry: 600989 is good value based on its Price-To-Earnings Ratio (14x) compared to the CN Chemicals industry average (28.5x)

Price to Earnings Ratio vs Fair Ratio

What is 600989'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.

600989 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	14x
Fair PE Ratio	33.3x

Price-To-Earnings vs Fair Ratio: 600989 is good value based on its Price-To-Earnings Ratio (14x) compared to the estimated Fair Price-To-Earnings Ratio (33.3x).

Share Price vs Fair Value

What is the Fair Price of 600989 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 600989 (CN¥13.55) is trading below our estimate of fair value (CN¥33.75)

Significantly Below Fair Value: 600989 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: Insufficient data to show price forecast.

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Future Growth

How is Ningxia Baofeng Energy Group 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

33.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 600989's forecast earnings growth (33.9% per year) is above the savings rate (3.2%).

Earnings vs Market: 600989's earnings (33.9% per year) are forecast to grow faster than the CN market (24.5% per year).

High Growth Earnings: 600989's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 600989's revenue (29.8% per year) is forecast to grow faster than the CN market (17.8% per year).

High Growth Revenue: 600989's revenue (29.8% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 600989's Return on Equity is forecast to be high in 3 years time (24.7%)

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Past Performance

How has Ningxia Baofeng Energy Group performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

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

21.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 600989 has a high level of non-cash earnings.

Growing Profit Margin: 600989's current net profit margins (28.5%) are lower than last year (32%).

Past Earnings Growth Analysis

Earnings Trend: 600989's earnings have grown significantly by 21.4% per year over the past 5 years.

Accelerating Growth: 600989's earnings growth over the past year (28.2%) exceeds its 5-year average (21.4% per year).

Earnings vs Industry: 600989 earnings growth over the past year (28.2%) exceeded the Chemicals industry 21.9%.

Return on Equity

High ROE: 600989's Return on Equity (21.9%) is considered high.

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Financial Health

How is Ningxia Baofeng Energy Group'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: 600989's short term assets (CN¥4.0B) do not cover its short term liabilities (CN¥7.4B).

Long Term Liabilities: 600989's short term assets (CN¥4.0B) do not cover its long term liabilities (CN¥6.9B).

Debt to Equity History and Analysis

Debt Level: 600989's net debt to equity ratio (20.1%) is considered satisfactory.

Reducing Debt: 600989's debt to equity ratio has reduced from 103.4% to 24.7% over the past 5 years.

Debt Coverage: 600989's debt is well covered by operating cash flow (77.3%).

Interest Coverage: 600989's interest payments on its debt are well covered by EBIT (81.5x coverage).

Balance Sheet

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Dividend

What is Ningxia Baofeng Energy Group current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

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

2.37%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 600989's dividend (2.37%) is higher than the bottom 25% of dividend payers in the CN market (0.47%).

High Dividend: 600989's dividend (2.37%) is in the top 25% of dividend payers in the CN market (1.93%)

Stability and Growth of Payments

Stable Dividend: 600989 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 600989 has only been paying a dividend for 3 years, and since then payments have fallen.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (33.2%), 600989's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (2306.9%), 600989's dividend payments are not well covered by cash flows.

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Management

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

6.9yrs

Average management tenure

CEO

Yuanguan Liu (55 yo)

no data

Tenure

CN¥3,787,300

Compensation

Mr. Yuanguan Liu has been an Executive Director of China Baofeng (International) Limited (formerly known as Mastercraft International Holdings Limited) since January 30, 2016. Mr. Liu serves as Chief Execu...

Leadership Team

Experienced Management: 600989's management team is seasoned and experienced (6.9 years average tenure).

Board Members

Experienced Board: 600989's board of directors are considered experienced (5.3 years average tenure).

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	2022/08/06 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31