DCF Studio

    0857.HK · HKG · Energy

    PetroChina Company Limited

    Also onConsensus Drift

    Implied value per share

    HKD 16.87

    Market price

    HKD 9.49

    Implied upside

    +77.7%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · CNY model at 1.1708

    AdjustedReports in CNY, trades in HKD. Modelled in CNY, converted at the end.
    AdjustedCapital expenditure runs at 9.4% of revenue against depreciation of 7.5%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: HKD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    HKD 16.87+77.7%
    Exit multiple
    HKD 9.58+1.0%
    Market price
    HKD 9.49

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (CNY). Outflows negative.

    0bn66bn132bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayCNY
    LineFY26FY27FY28FY29FY30CAGR
    RevenueCNY 2749.5bnCNY 2639.1bnCNY 2533.1bnCNY 2431.4bnCNY 2333.8bn-4.0%
    EBITCNY 252.5bnCNY 242.4bnCNY 232.6bnCNY 223.3bnCNY 214.3bn-4.0%
    NOPATCNY 210.8bnCNY 202.4bnCNY 194.2bnCNY 186.4bnCNY 179.0bn-4.0%
    Add depreciation & amortisationCNY 205.6bnCNY 197.4bnCNY 189.5bnCNY 181.8bnCNY 174.5bn-4.0%
    Less capital expenditureCNY -257.2bnCNY -246.9bnCNY -237.0bnCNY -227.5bnCNY -218.4bn-4.0%
    Less increase in working capitalCNY -27.3bnCNY -26.2bnCNY -25.2bnCNY -24.1bnCNY -23.2bn-4.0%
    Free cashflow to firmCNY 131.9bnCNY 126.6bnCNY 121.5bnCNY 116.7bnCNY 112.0bn-4.0%
    Discount factor0.96460.89750.83500.77690.7229-
    Present valueCNY 127.2bnCNY 113.6bnCNY 101.5bnCNY 90.6bnCNY 80.9bn-10.7%
    Present Value Of The ForecastCNY 514.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.20%HKD assumption - no free live source available for this market (assumption)
    Equity risk premium7.00%Market assumption
    Beta0.709Reported 0.565, pulled toward 1.0 (Blume)
    Cost of equity8.16%Risk-free + beta x equity risk premium
    Cost of debt4.95%Interest expense / average total debt
    Market capitalisationCNY 1736.9bn83.1% of capital
    Total debtCNY 353.8bn16.9% of capital, book value as a proxy
    Tax rate16.5%Effective, capped at statutory
    WACC7.48%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareCNY 14.41

    81% of EV

    Forecast FCFF, final year
    CNY 112.0bn
    Capex at depreciation, working capital in reinvestment
    CNY 182.2bn
    Less reinvestment at g/ROIC (17.8% of NOPAT)
    CNY -32.4bn
    Capitalised
    CNY 149.8bn
    ROIC (reported)
    14.1%
    Terminal value, undiscounted
    CNY 3084.7bn
    Terminal value, discounted
    CNY 2229.8bn
    Enterprise value
    CNY 2743.7bn
    Less net debt
    CNY 108.7bn
    Equity value
    CNY 2635.0bn

    Exit at 3.9x EBITDA

    Value per shareCNY 8.18

    68% of EV

    Terminal value, undiscounted
    CNY 1509.9bn
    Terminal value, discounted
    CNY 1091.5bn
    Enterprise value
    CNY 1605.4bn
    Less net debt
    CNY 108.7bn
    Equity value
    CNY 1496.7bn

    Spread between methods: 55%.

    Sensitivity

    Value per share (CNY) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.48%20.2022.0524.5127.9633.13
    6.48%15.9616.9518.1919.7721.88
    7.48%13.1413.7214.4115.2416.29
    8.48%11.1311.4911.8912.3712.94
    9.48%9.639.8610.1110.3910.72

    Outlined: this model. Green text: above today's price of 8.11. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year-4.0%-12.6%-8.6pp
    EBIT margin9.2%5.7%-3.5pp
    Discount rate7.5%11.1%+3.6pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.