601225.SS
SHAANXI COAL INDUSTRYOpen601225.SS discounted cash flow valuation
601225.SS Fair Value
Reverse DCF: today's price implies -5.7% a year of FCF growth for years 1–5, against 3.7% in this model.
Model: 3.7% from analyst next-year revenue growth. Fades linearly to terminal growth by year 10.
Model: 7.82% (CAPM, see the build-up).
Long-run growth after year 10; keep it at or below nominal GDP.
Value Bridge
| PV of free cash flow, years 1–10 | CNY 158.30B |
|---|---|
| PV of terminal value (64% of EV) | CNY 277.56B |
| Enterprise value | CNY 435.86B |
| + Cash & investments | CNY 45.05B |
| − Total debt | −CNY 27.13B |
| Equity value | CNY 453.78B |
| ÷ Shares outstanding | 9.70B |
| Value per share | CNY 46.81 |
| Market cap | CNY 266.61B |
Discount Rate Build-up
| Risk-free rate (10-yr Treasury) | 5.19% |
|---|---|
| Beta (adjusted toward 1) | 0.67 |
| Equity risk premium | 4.50% |
| Cost of equity (CAPM) | 8.18% |
| Pre-tax cost of debt | 5.19% |
| Tax rate | 17.7% |
| Debt / (equity + debt) | 9.2% |
| WACC | 7.82% |
Beta is Yahoo's, held between 0.5 and 2.5, then moved a third of the way toward 1. Cost of debt is interest expense ÷ total debt, held between the risk-free rate and 12%. WACC is at least the risk-free rate plus 2%.
Free Cash Flow: History and Projection
Sensitivity: Value per Share
| WACC ↓ / g → | 2.00% | 2.50% | 3.00% | 3.50% | 4.00% |
|---|---|---|---|---|---|
| 5.82% | 61.65 | 68.96 | 78.87 | 93.05 | 115.01 |
| 6.82% | 49.11 | 53.32 | 58.64 | 65.55 | 74.92 |
| 7.82% | 40.89 | 43.57 | 46.81 | 50.79 | 55.82 |
| 8.82% | 35.08 | 36.90 | 39.04 | 41.58 | 44.64 |
| 9.82% | 30.76 | 32.06 | 33.55 | 35.28 | 37.31 |
Green is above today's price, red below (full colour at ±30%). The outlined centre cell is the current inputs.
Projected Cash Flows
| Year | Growth | Free cash flow | Discount factor | Present value |
|---|---|---|---|---|
| Base (TTM) | — | CNY 19.57B | — | — |
| Year 1 | 3.7% | CNY 20.29B | 0.927 | CNY 18.82B |
| Year 2 | 3.7% | CNY 21.05B | 0.860 | CNY 18.10B |
| Year 3 | 3.7% | CNY 21.82B | 0.798 | CNY 17.41B |
| Year 4 | 3.7% | CNY 22.63B | 0.740 | CNY 16.75B |
| Year 5 | 3.7% | CNY 23.47B | 0.686 | CNY 16.11B |
| Year 6 | 3.6% | CNY 24.30B | 0.637 | CNY 15.47B |
| Year 7 | 3.4% | CNY 25.14B | 0.590 | CNY 14.84B |
| Year 8 | 3.3% | CNY 25.96B | 0.548 | CNY 14.21B |
| Year 9 | 3.1% | CNY 26.77B | 0.508 | CNY 13.60B |
| Year 10 | 3.0% | CNY 27.58B | 0.471 | CNY 12.99B |
Method
Two-stage free-cash-flow model, the same as the bot's lgf dcf: five years at the chosen growth rate, a straight-line fade to terminal growth by year ten, then a Gordon-growth terminal value. Everything is discounted at WACC.
Base cash flow is the trailing four quarters of operating cash flow minus capital expenditure (the latest fiscal year when quarters are missing). Default growth uses analyst long-term growth when Yahoo publishes it, else next year's revenue growth (steadier than one year's EPS), else next year's EPS growth, else revenue CAGR, held between −2% and 25%. Terminal growth defaults to 3%.
A DCF is only as good as its inputs. The terminal value is usually most of the answer, so read the sensitivity grid before the headline number. This is a model, not investment advice.