Yancoal Australia Ltd Engages in the exploration, development, production, and marketing of metallurgical and thermal coal in Japan, Singapore, China, South Korea, Taiwan, Thailand, Australia, and internationally.
The last earnings update was 83 days ago.
Discounted Cash Flow Calculation for SEHK:3668 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
SEHK:3668 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Yancoal Australia's share price is below the future cash flow value, and at a moderate discount (> 20%).
Yancoal Australia's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Yancoal Australia's earnings available for a low price, and how does
this compare to other companies in the same industry?
Yancoal Australia's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
Yancoal Australia's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Yancoal Australia's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
Oil and Gas
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
5/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Yancoal Australia's finances.
The net worth of a company is the difference between its assets and liabilities.
Yancoal Australia is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Yancoal Australia's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Yancoal Australia's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.5x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Reinhold H. Schmidt, MEng (Mineral Economics), has been the Chief Executive Officer of Yancoal Australia Ltd., since August 26, 2013. Mr. Schmidt has over 20 years' experience in the mining industry. He served as the Chief Operating Officer of Xstrata Coal Queensland Pty Limited at Xstrata plc. He served as Chief Operating Officer at Glencore Coal Pty Limited, Xstrata Coal Pty Limited and Glencore Coal Queensland Pty Limited. Mr. Schmidt served as an Executive General of Manager of Wandoan Project and General Manager of Commercial at Xstrata Coal Pty Limited. He served as President of the Colombian Coal assets of Glencore. He has been a Director of Middlemount Coal Pty Ltd since September 20, 2013 and NCIG Holdings Pty Ltd since October 11, 2013. He served as Director of Yancoal SCN Limited from November 13, 2014 to November 21, 2014. He is a Mining Engineer with a Master's degree in Mining Engineering.
Reinhold's compensation has been consistent with company performance over the past year.
Reinhold's remuneration is higher than average for companies of similar size in Hong Kong.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Yancoal Australia management team is over 5 years, this suggests they are a seasoned and experienced team.
Chief Executive Officer
Chief Operating Officer
Chief Financial Officer
General Manager of Investor Relations & Corporate Affairs
Executive GM of Group Legal & Compliance and Company Secretary
Chief Development Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Yancoal Australia board of directors is less than 3 years, this suggests a new board.
Yancoal Australia Ltd Engages in the exploration, development, production, and marketing of metallurgical and thermal coal in Japan, Singapore, China, South Korea, Taiwan, Thailand, Australia, and internationally. It owns 81% interests in the Moolarben coal mine located in the Western Coalfields of New South Wales; 100% interests in the Stratford Duralie mines located within the New South Wales Gloucester Basin; 100% interests in the Yarrabee mine located to the northeast of Blackwater in Central Queensland’s Bowen Basin; 50% interests in the Middlemount mine located to the north-east of Emerald in Queensland's Bowen Basin; and 80% interests in the Mount Thorley mine and 84.5% interests in the Warkworth mine in the Hunter Valley region of New South Wales. It also manages five other projects in New South Wales, Queensland, and Western Australia. The company was founded in 2004 and is based in Sydney, Australia. Yancoal Australia Ltd is a subsidiary of Yanzhou Coal Mining Company Limited.
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