KGHM Polska Miedz (WSE:KGH) - Share price, News & Analysis

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

KGH (PLN115.9) is trading below our estimate of [[fair value]] (PLN176.21)

KGH fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	5/6
Financial Health	6/6
Dividends	0/6

KGH Stock Overview

KGHM Polska Miedz S.A. mines, produces, and sells copper, precious metals, and non-ferrous metals in Poland and internationally.

Rewards

Trading at 34.2% below our estimate of its fair value

Earnings grew by 170.4% over the past year

Risk Analysis

Earnings are forecast to decline by an average of 23.4% per year for the next 3 years

High level of non-cash earnings

KGHM Polska Miedz Competitors

Jastrzebska Spólka Weglowa

WSE:JSW

zł5.7b

Grupa Kety

WSE:KTY

zł5.4b

Grupa Azoty

WSE:ATT

zł4.4b

Tongling Nonferrous Metals GroupLtd

SZSE:000630

CN¥32.4b

Price History & Performance

Summary of all time highs, changes and price drops for KGHM Polska Miedz
Historical stock prices
Current Share Price	zł115.90
52 Week High	zł193.85
52 Week Low	zł96.10
Beta	1.54
1 Month Change	11.71%
3 Month Change	-2.77%
1 Year Change	-39.60%
3 Year Change	46.19%
5 Year Change	-3.70%
Change since IPO	439.07%

Recent News & Updates

Aug 03

Here's Why We Think KGHM Polska Miedz (WSE:KGH) Is Well Worth Watching

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Jul 15

Returns On Capital Are Showing Encouraging Signs At KGHM Polska Miedz (WSE:KGH)

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Amongst other things...

Jun 08

Estimating The Fair Value Of KGHM Polska Miedz S.A. (WSE:KGH)

Does the June share price for KGHM Polska Miedz S.A. ( WSE:KGH ) reflect what it's really worth? Today, we will...

Shareholder Returns

	KGH	PL Metals and Mining	PL Market
7D	5.8%	4.2%	2.2%
1Y	-39.6%	-27.8%	-21.7%

Return vs Industry: KGH underperformed the Polish Metals and Mining industry which returned -28.6% over the past year.

Return vs Market: KGH underperformed the Polish Market which returned -22.4% over the past year.

Price Volatility

Is KGH's price volatile compared to industry and market?
KGH volatility
KGH Average Weekly Movement	8.5%
Metals and Mining Industry Average Movement	5.5%
Market Average Movement	6.5%
10% most volatile stocks in PL Market	12.0%
10% least volatile stocks in PL Market	4.2%

Stable Share Price: KGH is not significantly more volatile than the rest of Polish stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: KGH's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1961	33,894	Marcin Chludzinski	https://kghm.com

KGHM Polska Miedz S.A. mines, produces, and sells copper, precious metals, and non-ferrous metals in Poland and internationally. It offers copper cathodes, wire rods, Cu-Ofe and Cu-Ag wires, and granule products; silver in bullion bar and granule forms; gold bars; molybdenum; ammonium perrhenate, metallic rhenium, and rhenium powder; and lead, sulphuric acid, copper and nickel sulphate, and selenium products, as well as platinum, palladium, and rock salt. The company was founded in 1961 and is headquartered in Lubin, Poland.

KGHM Polska Miedz Fundamentals Summary

How do KGHM Polska Miedz's earnings and revenue compare to its market cap?
KGH fundamental statistics
Market Cap	zł23.18b
Earnings (TTM)	zł6.69b
Revenue (TTM)	zł32.04b

3.5x

P/E Ratio

0.7x

P/S Ratio

Is KGH overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
KGH income statement (TTM)
Revenue	zł32.04b
Cost of Revenue	zł25.09b
Gross Profit	zł6.96b
Other Expenses	zł269.00m
Earnings	zł6.69b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 17, 2022

Earnings per share (EPS)	33.45
Gross Margin	21.72%
Net Profit Margin	20.88%
Debt/Equity Ratio	20.2%

How did KGH perform over the long term?

See historical performance and comparison

Dividends

1.3%

Current Dividend Yield

4%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is KGH 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 KGH?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for KGH. This is calculated by dividing KGH's market cap by their current preferred multiple.
What is KGH's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	zł23.18b

KGH 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	0.8x
Enterprise Value/EBITDA	3.6x
PEG Ratio	-0.1x

Price to Earnings Ratio vs Peers

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

KGH PE Ratio vs Peers

The above table shows the PE ratio for KGH vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	5.6x
JSW Jastrzebska Spólka Weglowa	1.9x	-61.1%	zł5.7b
KTY Grupa Kety	7.5x	-7.5%	zł5.4b
ATT Grupa Azoty	3.3x	-19.9%	zł4.4b
000630 Tongling Nonferrous Metals GroupLtd	9.8x	-1.1%	CN¥32.4b
KGH KGHM Polska Miedz	3.5x	-23.4%	zł23.2b

Price-To-Earnings vs Peers: KGH is good value based on its Price-To-Earnings Ratio (3.5x) compared to the peer average (5.6x).

Price to Earnings Ratio vs Industry

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

Price-To-Earnings vs Industry: KGH is good value based on its Price-To-Earnings Ratio (3.5x) compared to the Polish Metals and Mining industry average (5.5x)

Price to Earnings Ratio vs Fair Ratio

What is KGH'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.

KGH PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	3.5x
Fair PE Ratio	7.2x

Price-To-Earnings vs Fair Ratio: KGH is good value based on its Price-To-Earnings Ratio (3.5x) compared to the estimated Fair Price-To-Earnings Ratio (7.2x).

Share Price vs Fair Value

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

Below Fair Value: KGH (PLN115.9) is trading below our estimate of fair value (PLN176.21)

Significantly Below Fair Value: KGH 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 KGHM Polska Miedz forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

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

-23.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: KGH's earnings are forecast to decline over the next 3 years (-23.4% per year).

Earnings vs Market: KGH's earnings are forecast to decline over the next 3 years (-23.4% per year).

High Growth Earnings: KGH's earnings are forecast to decline over the next 3 years.

Revenue vs Market: KGH's revenue is expected to decline over the next 3 years (-1.5% per year).

High Growth Revenue: KGH's revenue is forecast to decline over the next 3 years (-1.5% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: KGH's Return on Equity is forecast to be low in 3 years time (7.2%).

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Past Performance

How has KGHM Polska Miedz 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

57.4%

Historical annual earnings growth

Earnings and Revenue History

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

Growing Profit Margin: KGH's current net profit margins (20.9%) are higher than last year (9.9%).

Past Earnings Growth Analysis

Earnings Trend: KGH has become profitable over the past 5 years, growing earnings by 57.4% per year.

Accelerating Growth: KGH's earnings growth over the past year (170.4%) exceeds its 5-year average (57.4% per year).

Earnings vs Industry: KGH earnings growth over the past year (170.4%) exceeded the Metals and Mining industry 67.5%.

Return on Equity

High ROE: KGH's Return on Equity (23.3%) is considered high.

Discover strong past performing companies

Financial Health

How is KGHM Polska Miedz's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

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

Financial Position Analysis

Short Term Liabilities: KGH's short term assets (PLN12.9B) exceed its short term liabilities (PLN11.0B).

Long Term Liabilities: KGH's short term assets (PLN12.9B) exceed its long term liabilities (PLN10.4B).

Debt to Equity History and Analysis

Debt Level: KGH's net debt to equity ratio (8.6%) is considered satisfactory.

Reducing Debt: KGH's debt to equity ratio has reduced from 45.5% to 20.2% over the past 5 years.

Debt Coverage: KGH's debt is well covered by operating cash flow (87.3%).

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

Balance Sheet

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Dividend

What is KGHM Polska Miedz current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

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

1.29%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: KGH's dividend (1.29%) isn’t notable compared to the bottom 25% of dividend payers in the Polish market (2.7%).

High Dividend: KGH's dividend (1.29%) is low compared to the top 25% of dividend payers in the Polish market (8.86%).

Stability and Growth of Payments

Stable Dividend: KGH is not paying a notable dividend for the Polish market, therefore no need to check if payments are stable.

Growing Dividend: KGH is not paying a notable dividend for the Polish market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: KGH is not paying a notable dividend for the Polish market.

Cash Payout to Shareholders

Cash Flow Coverage: KGH is not paying a notable dividend for the Polish market.

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Management

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

1.1yrs

Average management tenure

CEO

Marcin Chludzinski

4.17yrs

Tenure

zł2,220,000

Compensation

Mr. Marcin Chludzinski serves as Chief Executive Officer at KGHM Polska Miedz S.A. and serves as its President of the Management Board since July 6, 2018. He is Member of Supervisory Board at TAURON Polska...

CEO Compensation Analysis

Compensation vs Market: Marcin's total compensation ($USD489.22K) is about average for companies of similar size in the Polish market ($USD503.56K).

Compensation vs Earnings: Marcin's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: KGH's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.

Board Members

Experienced Board: KGH'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	2022/08/11 00:00
End of Day Share Price	2022/08/11 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31