Zhejiang Huayou Cobalt (SHSE:603799) - Share price, News & Analysis

Q: What is the Fair Price of 603799 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

603799 (CN¥84.8) is trading above our estimate of [[fair value]] (CN¥19.51)

603799 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	6/6
Past Performance	4/6
Financial Health	3/6
Dividends	1/6

603799 Stock Overview

Zhejiang Huayou Cobalt Co., Ltd engages in the research, development, manufacture, and sale of lithium battery materials and cobalt materials in China and internationally.

Rewards

Price-To-Earnings ratio (30.3x) is below the CN market (34.3x)

Earnings are forecast to grow 36.55% per year

Earnings grew by 172.1% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

High level of non-cash earnings

Zhejiang Huayou Cobalt Competitors

China Northern Rare Earth (Group) High-TechLtd

SHSE:600111

CN¥119.3b

Ganfeng Lithium

SZSE:002460

CN¥171.6b

Xiamen Tungsten

SHSE:600549

CN¥37.6b

Sinomine Resource Group

SZSE:002738

CN¥41.4b

Price History & Performance

Summary of all time highs, changes and price drops for Zhejiang Huayou Cobalt
Historical stock prices
Current Share Price	CN¥84.80
52 Week High	CN¥113.12
52 Week Low	CN¥52.32
Beta	1.46
1 Month Change	-7.00%
3 Month Change	42.85%
1 Year Change	-15.86%
3 Year Change	312.11%
5 Year Change	222.77%
Change since IPO	2,820.48%

Shareholder Returns

	603799	CN Metals and Mining	CN Market
7D	0.5%	-1.5%	-0.5%
1Y	-15.9%	-9.5%	-10.4%

Return vs Industry: 603799 underperformed the CN Metals and Mining industry which returned -9.5% over the past year.

Return vs Market: 603799 underperformed the CN Market which returned -10.4% over the past year.

Price Volatility

Is 603799's price volatile compared to industry and market?
603799 volatility
603799 Average Weekly Movement	7.5%
Metals and Mining Industry Average Movement	6.3%
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: 603799 is not significantly more volatile than the rest of CN stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: 603799's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2002	14,643	Hongliang Chen	https://www.huayou.com

Zhejiang Huayou Cobalt Co., Ltd engages in the research, development, manufacture, and sale of lithium battery materials and cobalt materials in China and internationally. The company’s products include battery grade cobalt tetroxide and cobalt sulfate, and cobalt oxide; electrodeposited copper and copper oxide; cobalt trioxide, cobalt cathode, cobalt hydroxide battery grade, iron phosphate, and ferric phosphate; and Li carbonic acid and ternary precursors. Its products are used for Li-ion battery cathode material, high temperature alloy for aviation and aerospace, cemented carbide, colorant and glaze material, rubber adhesive, petrochemical catalysts, magnetic materials, glass, as well as used in the manufacture of dyes, paint, anti-wrinkle, and fireworks.

Zhejiang Huayou Cobalt Fundamentals Summary

How do Zhejiang Huayou Cobalt's earnings and revenue compare to its market cap?
603799 fundamental statistics
Market Cap	CN¥134.63b
Earnings (TTM)	CN¥4.45b
Revenue (TTM)	CN¥42.10b

30.3x

P/E Ratio

3.2x

P/S Ratio

Is 603799 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
603799 income statement (TTM)
Revenue	CN¥42.10b
Cost of Revenue	CN¥33.82b
Gross Profit	CN¥8.28b
Other Expenses	CN¥3.83b
Earnings	CN¥4.45b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.80
Gross Margin	19.67%
Net Profit Margin	10.57%
Debt/Equity Ratio	112.3%

How did 603799 perform over the long term?

See historical performance and comparison

Dividends

0.3%

Current Dividend Yield

8%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 603799 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

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 603799?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 603799. This is calculated by dividing 603799's market cap by their current preferred multiple.
What is 603799's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥134.63b

603799 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	3.6x
Enterprise Value/EBITDA	22.6x
PEG Ratio	0.8x

Price to Earnings Ratio vs Peers

How does 603799's PE Ratio compare to its peers?

603799 PE Ratio vs Peers

The above table shows the PE ratio for 603799 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	25.3x
600111 China Northern Rare Earth (Group) High-TechLtd	19.3x	24.6%	CN¥119.3b
002460 Ganfeng Lithium	22.1x	4.4%	CN¥171.6b
600549 Xiamen Tungsten	26.8x	8.8%	CN¥37.6b
002738 Sinomine Resource Group	33.1x	46.4%	CN¥41.4b
603799 Zhejiang Huayou Cobalt	30.3x	36.5%	CN¥134.6b

Price-To-Earnings vs Peers: 603799 is expensive based on its Price-To-Earnings Ratio (30.3x) compared to the peer average (25.3x).

Price to Earnings Ratio vs Industry

How does 603799's PE Ratio compare vs other companies in the CN Metals and Mining Industry?

Price-To-Earnings vs Industry: 603799 is good value based on its Price-To-Earnings Ratio (30.3x) compared to the CN Metals and Mining industry average (30.7x)

Price to Earnings Ratio vs Fair Ratio

What is 603799'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.

603799 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	30.3x
Fair PE Ratio	35.9x

Price-To-Earnings vs Fair Ratio: 603799 is good value based on its Price-To-Earnings Ratio (30.3x) compared to the estimated Fair Price-To-Earnings Ratio (35.9x).

Share Price vs Fair Value

What is the Fair Price of 603799 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 603799 (CN¥84.8) is trading above our estimate of fair value (CN¥19.51)

Significantly Below Fair Value: 603799 is trading above our estimate of fair value.

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 less than 20% higher than the current share price.

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Future Growth

How is Zhejiang Huayou Cobalt forecast to perform in the next 1 to 3 years based on estimates from 9 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

36.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 603799's forecast earnings growth (36.5% per year) is above the savings rate (3.2%).

Earnings vs Market: 603799's earnings (36.5% per year) are forecast to grow faster than the CN market (24.5% per year).

High Growth Earnings: 603799's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 603799's revenue (20.2% per year) is forecast to grow faster than the CN market (17.8% per year).

High Growth Revenue: 603799's revenue (20.2% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 603799's Return on Equity is forecast to be high in 3 years time (26.2%)

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Past Performance

How has Zhejiang Huayou Cobalt 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

20.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 603799 has a high level of non-cash earnings.

Growing Profit Margin: 603799's current net profit margins (10.6%) are higher than last year (7.1%).

Past Earnings Growth Analysis

Earnings Trend: 603799's earnings have grown significantly by 20.2% per year over the past 5 years.

Accelerating Growth: 603799's earnings growth over the past year (172.1%) exceeds its 5-year average (20.2% per year).

Earnings vs Industry: 603799 earnings growth over the past year (172.1%) exceeded the Metals and Mining industry 21.9%.

Return on Equity

High ROE: 603799's Return on Equity (17.6%) is considered low.

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Financial Health

How is Zhejiang Huayou Cobalt's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

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

Financial Position Analysis

Short Term Liabilities: 603799's short term assets (CN¥41.1B) exceed its short term liabilities (CN¥30.8B).

Long Term Liabilities: 603799's short term assets (CN¥41.1B) exceed its long term liabilities (CN¥18.5B).

Debt to Equity History and Analysis

Debt Level: 603799's net debt to equity ratio (40.3%) is considered high.

Reducing Debt: 603799's debt to equity ratio has increased from 108.4% to 112.3% over the past 5 years.

Debt Coverage: 603799's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 603799 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Zhejiang Huayou Cobalt current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

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

0.27%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 603799's dividend (0.27%) isn’t notable compared to the bottom 25% of dividend payers in the CN market (0.47%).

High Dividend: 603799's dividend (0.27%) is low compared to the top 25% of dividend payers in the CN market (1.93%).

Stability and Growth of Payments

Stable Dividend: 603799 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 603799's dividend payments have increased, but the company has only paid a dividend for 7 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (8.2%), 603799's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 603799 is paying a dividend but the company has no free cash flows.

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Management

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

5.8yrs

Average management tenure

CEO

Hongliang Chen (49 yo)

6.08yrs

Tenure

CN¥10,694,900

Compensation

Mr. Hongliang Chen has been General Manager and Managing Director of Zhejiang Huayou Cobalt Co. Ltd. since July 2016 and served as its Deputy General Manager until July 2016. Mr. Chen joined at Zhejiang Hu...

Leadership Team

Experienced Management: 603799's management team is seasoned and experienced (5.8 years average tenure).

Board Members

Experienced Board: 603799's board of directors are considered experienced (3.3 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	2022/08/07 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31