Grupa Azoty Zaklady Chemiczne Police (WSE:PCE) - Share price, News & Analysis

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

PCE (PLN10.2) is trading below our estimate of [[fair value]] (PLN19.49)

PCE fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	0/6
Past Performance	2/6
Financial Health	3/6
Dividends	0/6

PCE Stock Overview

Grupa Azoty Zaklady Chemiczne Police S.A.

Rewards

Trading at 47.7% below our estimate of its fair value

Risk Analysis

Has a high level of debt

Profit margins (3.2%) are lower than last year (4.7%)

Grupa Azoty Zaklady Chemiczne Police Competitors

Zaklady Azotowe Pulawy

WSE:ZAP

zł1.4b

PCC Rokita

WSE:PCR

zł1.5b

Ciech

WSE:CIE

zł1.7b

Fabryka Farb i Lakierów Sniezka

WSE:SKA

zł810.1m

Price History & Performance

Summary of all time highs, changes and price drops for Grupa Azoty Zaklady Chemiczne Police
Historical stock prices
Current Share Price	zł10.20
52 Week High	zł13.70
52 Week Low	zł9.30
Beta	0.23
1 Month Change	-5.56%
3 Month Change	-13.19%
1 Year Change	-16.74%
3 Year Change	-27.14%
5 Year Change	-51.43%
Change since IPO	7.37%

Recent News & Updates

Mar 03

Is Grupa Azoty Zaklady Chemiczne Police (WSE:PCE) Using Too Much Debt?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

	PCE	PL Chemicals	PL Market
7D	-5.6%	-3.5%	-2.9%
1Y	-16.7%	-9.8%	-32.0%

Return vs Industry: PCE underperformed the Polish Chemicals industry which returned -9.8% over the past year.

Return vs Market: PCE exceeded the Polish Market which returned -32% over the past year.

Price Volatility

Is PCE's price volatile compared to industry and market?
PCE volatility
PCE Average Weekly Movement	4.8%
Chemicals Industry Average Movement	5.3%
Market Average Movement	6.1%
10% most volatile stocks in PL Market	11.7%
10% least volatile stocks in PL Market	3.8%

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

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

About the Company

Founded	Employees	CEO	Website
1995	3,345	n/a	https://zchpolice.grupaazoty.com

Grupa Azoty Zaklady Chemiczne Police S.A. manufactures and sells mineral fertilizers in Poland, Germany, South America, rest of Europe, and internationally. The company provides compound fertilizers, such as nitrogen, phosphorus, and potassium fertilizers under the POLIFOSKA and POLIDAP brand; nitrogen-based fertilizers; phosphoric and sulfuric acids; and urea solutions to reduce nitrogen oxide emissions from diesel engines and used as a reducing agent in vehicle emissions control technologies under the NOXy and Pulnox name, as well as liquid ammonia. It also offers pigments comprising titanium white products, including iron sulfate and hydrolytic acid under the TYTANPOL brand, which is used in production of paints and varnishes, printing inks, and plastics, as well as paper and laminates; and produces electricity, hot steam, and heating water, as well as fly ash.

Grupa Azoty Zaklady Chemiczne Police Fundamentals Summary

How do Grupa Azoty Zaklady Chemiczne Police's earnings and revenue compare to its market cap?
PCE fundamental statistics
Market Cap	zł1.27b
Earnings (TTM)	zł113.56m
Revenue (TTM)	zł3.55b

11.2x

P/E Ratio

0.4x

P/S Ratio

Is PCE overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
PCE income statement (TTM)
Revenue	zł3.55b
Cost of Revenue	zł3.11b
Gross Profit	zł442.63m
Other Expenses	zł329.07m
Earnings	zł113.56m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Sep 28, 2022

Earnings per share (EPS)	0.91
Gross Margin	12.47%
Net Profit Margin	3.20%
Debt/Equity Ratio	48.8%

How did PCE perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

3/6

Valuation Score 3/6

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 PCE?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for PCE. This is calculated by dividing PCE's market cap by their current preferred multiple.
What is PCE's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	zł1.27b

PCE 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	0.6x
Enterprise Value/EBITDA	7.9x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

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

PCE PE Ratio vs Peers

The above table shows the PE ratio for PCE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	7.7x
ZAP Zaklady Azotowe Pulawy	2.2x	n/a	zł1.4b
PCR PCC Rokita	3x	-39.9%	zł1.5b
CIE Ciech	6.8x	4.8%	zł1.7b
SKA Fabryka Farb i Lakierów Sniezka	18.8x	n/a	zł810.1m
PCE Grupa Azoty Zaklady Chemiczne Police	11.2x	n/a	zł1.3b

Price-To-Earnings vs Peers: PCE is expensive based on its Price-To-Earnings Ratio (11.2x) compared to the peer average (7.7x).

Price to Earnings Ratio vs Industry

How does PCE's PE Ratio compare vs other companies in the European Chemicals Industry?

Price-To-Earnings vs Industry: PCE is good value based on its Price-To-Earnings Ratio (11.2x) compared to the European Chemicals industry average (11.4x)

Price to Earnings Ratio vs Fair Ratio

What is PCE'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.

PCE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11.2x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate PCE's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

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

Below Fair Value: PCE (PLN10.2) is trading below our estimate of fair value (PLN19.49)

Significantly Below Fair Value: PCE 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 Grupa Azoty Zaklady Chemiczne Police forecast to perform in the next 1 to 3 years based on estimates from 0 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

2.7%

Forecasted Materials industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Grupa Azoty Zaklady Chemiczne Police has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.

Discover growth companies

Examine whether Grupa Azoty Zaklady Chemiczne Police is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
Grupa Azoty Zaklady Chemiczne Police competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has Grupa Azoty Zaklady Chemiczne Police performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

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

19.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PCE has high quality earnings.

Growing Profit Margin: PCE's current net profit margins (3.2%) are lower than last year (4.7%).

Past Earnings Growth Analysis

Earnings Trend: PCE's earnings have grown by 19.8% per year over the past 5 years.

Accelerating Growth: PCE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PCE had negative earnings growth (-3.5%) over the past year, making it difficult to compare to the Chemicals industry average (36%).

Return on Equity

High ROE: PCE's Return on Equity (5.9%) is considered low.

Discover strong past performing companies

Financial Health

How is Grupa Azoty Zaklady Chemiczne Police'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: PCE's short term assets (PLN1.7B) do not cover its short term liabilities (PLN1.9B).

Long Term Liabilities: PCE's short term assets (PLN1.7B) exceed its long term liabilities (PLN572.9M).

Debt to Equity History and Analysis

Debt Level: PCE's net debt to equity ratio (46.1%) is considered high.

Reducing Debt: PCE's debt to equity ratio has increased from 38.3% to 48.8% over the past 5 years.

Debt Coverage: PCE's debt is well covered by operating cash flow (99.2%).

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

Balance Sheet

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Dividend

What is Grupa Azoty Zaklady Chemiczne Police 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

Dividend Yield vs Market

Grupa Azoty Zaklady Chemiczne Police Dividend Yield vs Market

How does Grupa Azoty Zaklady Chemiczne Police dividend yield compare to the market?
Segment	Dividend Yield
Company (Grupa Azoty Zaklady Chemiczne Police)	0%
Market Bottom 25% (PL)	3.0%
Market Top 25% (PL)	9.4%
Industry Average (Chemicals)	10.2%
Analyst forecast in 3 Years (Grupa Azoty Zaklady Chemiczne Police)	n/a

Notable Dividend: Unable to evaluate PCE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate PCE's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if PCE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if PCE's dividend payments have been increasing.

Earnings Payout to Shareholders

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

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as PCE has not reported any payouts.

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Management

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

1.4yrs

Average management tenure

CEO

Grupa Azoty Zaklady Chemiczne Police has no CEO, or we have no data on them.

Leadership Team

Experienced Management: PCE's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.

Board Members

Experienced Board: PCE's board of directors are considered experienced (3.7 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

What is the ownership structure of PCE?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	1	0.0%
General Public	4,454,283	3.6%
Institutions	16,097,257	13.0%
State or Government	25,572,727	20.6%
Public Companies	78,051,500	62.9%

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

Top Shareholders

Top 6 shareholders own 96.41% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
62.86%	Grupa Azoty S.A.	78,051,500	PLN796.1m	0%	no data
13.13%	Agencja Rozwoju Przemyslu S.A.	16,299,649	PLN166.3m	0%	no data
12.96%	Powszechne Towarzystwo Emerytalne PZU SA	16,092,634	PLN164.1m	0%	1.34%
7.47%	Ministerstwo Skarbu Panstwa	9,273,078	PLN94.6m	0%	no data
0.0037%	Dimensional Fund Advisors LP	4,623	PLN47.2k	-12.86%	no data
0%	Anna Tarocinska	1	PLN10.2	0%	no data

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
PCE	WSE (Warsaw Stock Exchange)	Yes	Ordinary Shares	PL	PLN	Sep 2005
697	DB (Deutsche Boerse AG)	Yes	Ordinary Shares	DE	EUR	Sep 2005

Data	Last Updated (UTC time)
Company Analysis	2022/09/28 00:00
End of Day Share Price	2022/09/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31