DCF Studio

    NHC.AX · ASX · Energy

    New Hope Corporation Limited

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    AUD 4.37

    Market price

    AUD 6.38

    Implied upside

    -31.4%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    AdjustedSome line items were not reported and have been derived. Each one is labelled in the workings below.
    AdjustedBeta of -0.499 is not usable in a cost of equity. Clamped to 0.30.

    Value Per Share

    Perpetuity growth
    AUD 4.37-31.4%
    Exit multiple
    AUD 4.72-26.0%
    Market price
    AUD 6.38

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (AUD). Outflows negative.

    0m162m324mFY27FY28FY29FY30FY31
    Nominal FCFFDiscounted to todayAUD
    LineFY27FY28FY29FY30FY31CAGR
    RevenueAUD 1.5bnAUD 1.3bnAUD 1.1bnAUD 978.5mAUD 846.4m-13.5%
    EBITAUD 442.8mAUD 383.0mAUD 331.3mAUD 286.6mAUD 247.9m-13.5%
    NOPATAUD 310.0mAUD 268.1mAUD 231.9mAUD 200.6mAUD 173.5m-13.5%
    Add depreciation & amortisationAUD 188.8mAUD 163.3mAUD 141.3mAUD 122.2mAUD 105.7m-13.5%
    Less capital expenditureAUD -193.5mAUD -167.4mAUD -144.8mAUD -125.2mAUD -108.3m-13.5%
    Less increase in working capitalAUD 18.6mAUD 16.0mAUD 13.9mAUD 12.0mAUD 10.4m+13.5%
    Free cashflow to firmAUD 323.9mAUD 280.1mAUD 242.3mAUD 209.6mAUD 181.3m-13.5%
    Discount factor0.96680.90370.84470.78960.7381-
    Present valueAUD 313.1mAUD 253.2mAUD 204.7mAUD 165.5mAUD 133.8m-19.1%
    Present Value Of The ForecastAUD 1.1bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate5.35%Australian Government 10-year (RBA F2)
    Equity risk premium6.00%Market assumption
    Beta0.300Clamped from a reported -0.499
    Cost of equity7.15%Risk-free + beta x equity risk premium
    Cost of debt6.71%Interest expense / average total debt
    Market capitalisationAUD 5.4bn93.2% of capital
    Total debtAUD 391.8m6.8% of capital, book value as a proxy
    Tax rate30.0%Effective, capped at statutory
    WACC6.98%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 shareAUD 4.37

    68% of EV

    Forecast FCFF, final year
    AUD 181.3m
    Capex at depreciation, working capital in reinvestment
    AUD 173.5m
    Less reinvestment at g/ROIC (23.2% of NOPAT)
    AUD -40.3m
    Capitalised
    AUD 133.2m
    ROIC (reported)
    10.8%
    Terminal value, undiscounted
    AUD 3.0bn
    Terminal value, discounted
    AUD 2.2bn
    Enterprise value
    AUD 3.3bn
    Less net debt
    AUD -386.7m
    Equity value
    AUD 3.7bn

    Exit at 9.7x EBITDA

    Value per shareAUD 4.72

    70% of EV

    Terminal value, undiscounted
    AUD 3.4bn
    Terminal value, discounted
    AUD 2.5bn
    Enterprise value
    AUD 3.6bn
    Less net debt
    AUD -386.7m
    Equity value
    AUD 4.0bn

    Spread between methods: 8%.

    Sensitivity

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

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.98%5.906.356.997.949.53
    5.98%4.825.035.315.676.18
    6.98%4.134.244.374.544.75
    7.98%3.653.713.783.863.95
    8.98%3.303.333.363.403.44

    Outlined: this model. Green text: above today's price of 6.38. 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-13.5%-4.5%+9.0pp
    EBIT margin29.3%44.5%+15.2pp
    Discount rate7.0%5.3%-1.7pp
    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.