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MRF

Merafe ResourcesJSE:MRF Stock Report

Last Price

R1.25

Market Cap

R3.1b

7D

-3.8%

1Y

115.5%

Updated

23 Jan, 2022

Data

Company Financials +
MRF fundamental analysis
Snowflake Score
Valuation5/6
Future Growth1/6
Past Performance1/6
Financial Health6/6
Dividends5/6

MRF Stock Overview

Merafe Resources Limited, together with its subsidiaries, engages in the mining and beneficiation of chrome ore into ferrochrome.

Merafe Resources Competitors

Kumba Iron Ore

JSE:KIO

R174.9b

Glencore

LSE:GLEN

UK£53.7b

Anglo American

LSE:AAL

UK£41.7b

Anglo American Platinum

JSE:AMS

R469.3b

Price History & Performance

Summary of all time highs, changes and price drops for Merafe Resources
Historical stock prices
Current Share PriceR1.25
52 Week HighR1.38
52 Week LowR0.47
Beta0.68
1 Month Change12.61%
3 Month Change10.62%
1 Year Change115.52%
3 Year Change-10.71%
5 Year Change-34.21%
Change since IPO1,685.77%

Recent News & Updates

Aug 17
We Think That There Are Issues Underlying Merafe Resources' (JSE:MRF) Earnings

We Think That There Are Issues Underlying Merafe Resources' (JSE:MRF) Earnings

Unsurprisingly, Merafe Resources Limited's ( JSE:MRF ) stock price was strong on the back of its healthy earnings...

Shareholder Returns

MRFZA Metals and MiningZA Market
7D-3.8%2.6%-0.3%
1Y115.5%3.4%13.9%

Return vs Industry: MRF exceeded the ZA Metals and Mining industry which returned 3.4% over the past year.

Return vs Market: MRF exceeded the ZA Market which returned 13.9% over the past year.

Price Volatility

Is MRF's price volatile compared to industry and market?
MRF volatility
MRF Average Weekly Movement5.3%
Metals and Mining Industry Average Movement7.0%
Market Average Movement5.7%
10% most volatile stocks in ZA Market12.1%
10% least volatile stocks in ZA Market3.3%

Stable Share Price: MRF is not significantly more volatile than the rest of ZA stocks over the past 3 months, typically moving +/- 5% a week.

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

About the Company

FoundedEmployeesCEOWebsite
1987n/aZanele Matlalahttps://www.meraferesources.co.za

Merafe Resources Limited, together with its subsidiaries, engages in the mining and beneficiation of chrome ore into ferrochrome. The company operates five ferrochrome smelters, twenty-two ferrochrome furnaces, six chrome ore mines, and five UG2 plants. It primarily serves stainless and specialty steel mills in Africa, the United States, China, Japan, Western Europe, and internationally.

Merafe Resources Fundamentals Summary

How do Merafe Resources's earnings and revenue compare to its market cap?
MRF fundamental statistics
Market CapR3.12b
Earnings (TTM)R534.43m
Revenue (TTM)R6.19b

5.8x

P/E Ratio

0.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MRF income statement (TTM)
RevenueR6.19b
Cost of RevenueR5.16b
Gross ProfitR1.03b
ExpensesR493.91m
EarningsR534.43m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Mar 22, 2022

Earnings per share (EPS)0.21
Gross Margin16.62%
Net Profit Margin8.64%
Debt/Equity Ratio0%

How did MRF perform over the long term?

See historical performance and comparison

Dividends

11.2%

Current Dividend Yield

33%

Payout Ratio

Valuation

Is Merafe Resources undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: MRF (ZAR1.25) is trading below our estimate of fair value (ZAR5.9)

Significantly Below Fair Value: MRF is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: MRF is good value based on its PE Ratio (5.8x) compared to the ZA Metals and Mining industry average (6x).

PE vs Market: MRF is good value based on its PE Ratio (5.8x) compared to the ZA market (10.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate MRF's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: MRF is good value based on its PB Ratio (1.1x) compared to the ZA Metals and Mining industry average (1.3x).


Future Growth

How is Merafe Resources forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

6.3%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if MRF's forecast earnings growth is above the savings rate (8.8%).

Earnings vs Market: Insufficient data to determine if MRF's earnings are forecast to grow faster than the ZA market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: MRF's revenue (6.3% per year) is forecast to grow faster than the ZA market (6.3% per year).

High Growth Revenue: MRF's revenue (6.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MRF's Return on Equity is forecast to be high in 3 years time


Past Performance

How has Merafe Resources performed over the past 5 years?

-47.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MRF has a large one-off gain of ZAR289.0M impacting its June 30 2021 financial results.

Growing Profit Margin: MRF became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: MRF's earnings have declined by 47.9% per year over the past 5 years.

Accelerating Growth: MRF has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: MRF has become profitable in the last year, making it difficult to compare its past year earnings growth to the Metals and Mining industry (218.4%).


Return on Equity

High ROE: MRF's Return on Equity (18.8%) is considered low.


Financial Health

How is Merafe Resources's financial position?


Financial Position Analysis

Short Term Liabilities: MRF's short term assets (ZAR3.5B) exceed its short term liabilities (ZAR957.1M).

Long Term Liabilities: MRF's short term assets (ZAR3.5B) exceed its long term liabilities (ZAR217.2M).


Debt to Equity History and Analysis

Debt Level: MRF is debt free.

Reducing Debt: MRF has no debt compared to 5 years ago when its debt to equity ratio was 14%.

Debt Coverage: MRF has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: MRF has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is Merafe Resources's current dividend yield, its reliability and sustainability?

11.20%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: MRF's dividend (11.2%) is higher than the bottom 25% of dividend payers in the ZA market (2.87%).

High Dividend: MRF's dividend (11.2%) is in the top 25% of dividend payers in the ZA market (7.34%)


Stability and Growth of Payments

Stable Dividend: MRF's dividend payments have been volatile in the past 10 years.

Growing Dividend: MRF's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.8%), MRF's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: MRF's dividends in 3 years are forecast to be covered by earnings (54.3% payout ratio).


Next Steps

Management

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

7.3yrs

Average management tenure


CEO

Zanele Matlala (58 yo)

9.58yrs

Tenure

R6,459,000

Compensation

Ms. Zanele Joyce Matlala, BCom, BCompt (Hons), CA (SA), has been Independent Non-Executive Director of Royal Bafokeng Platinum Limited since September 25, 2018. She has been the Chief Executive Officer at...


CEO Compensation Analysis

Compensation vs Market: Zanele's total compensation ($USD428.52K) is about average for companies of similar size in the ZA market ($USD530.76K).

Compensation vs Earnings: Zanele's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: MRF's management team is seasoned and experienced (7.3 years average tenure).


Board Members

Experienced Board: MRF's board of directors are not considered experienced ( 2.7 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.


Top Shareholders

Company Information

Merafe Resources Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Merafe Resources Limited
  • Ticker: MRF
  • Exchange: JSE
  • Founded: 1987
  • Industry: Steel
  • Sector: Materials
  • Implied Market Cap: R3.124b
  • Shares outstanding: 2.50b
  • Website: https://www.meraferesources.co.za

Number of Employees


Location

  • Merafe Resources Limited
  • Building B
  • Second Floor
  • Bryanston
  • Gauteng
  • 2191
  • South Africa

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/23 17:01
End of Day Share Price2022/01/21 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.