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Zhongyuan Environmental Protection Co., Ltd.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: Environmental ServicesSector: Industrials

Fair Value Summary

Current Price$8.29
5Y Range-13.99 – -10.27
5Y Selected-12.13
(-) Safety Margin41.64%
5Y Buy Price$-7.08
Upside (to Buy Price)-185.41%
10Y Range2.22 – 9.04
10Y Selected5.63
(-) Safety Margin41.64%
10Y Buy Price$3.29
Upside (to Buy Price)-60.36%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.3130
Revenue R2 (10Y)0.7551
Net Income R2 (5Y)0.9565
Net Income R2 (10Y)0.9266
EBITDA R2 (5Y)0.9697
EBITDA R2 (10Y)0.9313
FCF R2 (5Y)0.0783
FCF R2 (10Y)0.6710
Safety Score0.5836

DA 10-Year Projection

Metric2025202620272028202920302031203220332034
% Growth28.60%25.87%23.13%20.40%17.67%14.93%12.20%9.47%6.73%4.00%
Revenue6,999.998,810.6010,848.7213,061.8015,369.3217,664.4119,819.4121,695.6123,156.4324,082.69
EBITDA2,702.603,401.654,188.545,042.975,933.876,819.987,651.998,376.378,940.379,297.98
D&A-512.72-645.34-794.62-956.72-1,125.74-1,293.84-1,451.69-1,589.11-1,696.11-1,763.95
EBIT2,189.882,756.313,393.914,086.254,808.145,526.136,200.316,787.267,244.267,534.03
Pro forma Taxes-251.02-315.95-389.04-468.40-551.15-633.46-710.74-778.02-830.40-863.62
NOPAT1,938.852,440.353,004.873,617.854,256.994,892.685,489.576,009.246,413.856,670.41
Capital Expenditures-1,901.40-2,393.22-2,946.83-3,547.97-4,174.76-4,798.18-5,383.54-5,893.17-6,289.97-6,541.57
NWC Investment-1,147.59-1,334.75-1,502.47-1,631.44-1,701.07-1,691.91-1,588.64-1,383.10-1,076.89-682.82
(+) D&A512.72645.34794.62956.721,125.741,293.841,451.691,589.111,696.111,763.95
Free Cash Flow-597.43-642.28-649.81-604.85-493.11-303.56-30.92322.07743.101,209.97
Diluted Shares Outstanding980,257,388.25980,257,388.25980,257,388.25980,257,388.25980,257,388.25980,257,388.25980,257,388.25980,257,388.25980,257,388.25980,257,388.25

Discounting Periods

MetricDec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32Dec-33Dec-34
Period Start9/30/251/1/261/1/271/1/281/1/291/1/301/1/311/1/321/1/331/1/34
Period End12/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/3212/31/3312/31/34
Mid-Point11/15/257/2/267/2/277/1/287/2/297/2/307/2/317/1/327/2/337/2/34
Time (t)0.100.461.462.463.464.465.466.467.468.46
Valuation Date1/16/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.97%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.880.810.740.680.620.570.520.48
PV UFCF-592.25-617.06-572.24-488.22-364.83-205.87-19.22183.51388.09579.22
Raw: -8,288.57
-5,871.18
Raw: 20,338.17
9,321.23

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-8,505.777,612.37
(-) Net Debt2,942.502,942.50
Equity Value-11,448.284,669.87
(/) Shares Out980.26980.26
Fair Value$-11.68$4.76
(-) Safety Margin41.64%41.64%
Buy Price$-6.82$2.78
Current Price$8.29$8.29
Upside (to Buy Price)-182.22%-66.46%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 2.47%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.870.790.720.650.590.540.490.44
PV UFCF-591.71-614.48-564.66-477.38-353.50-197.66-18.29173.01362.55536.19
Raw: -6,625.93
-4,526.89
Raw: 16,258.44
6,866.50

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-7,128.625,120.58
(-) Net Debt2,942.502,942.50
Equity Value-10,071.122,178.08
(/) Shares Out980.26980.26
Fair Value$-10.27$2.22
(-) Safety Margin41.64%41.64%
Buy Price$-6.00$1.30
Current Price$8.29$8.29
Upside (to Buy Price)-172.33%-84.36%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 3.47%
Metric2025202620272028202920302031203220332034TV (5y)TV (10y)
Discount Factor0.990.960.890.830.760.710.650.600.560.52
PV UFCF-592.79-619.68-579.98-499.41-376.65-214.50-20.21194.76415.69626.15
Raw: -11,029.43
-8,102.80
Raw: 27,063.59
13,470.36

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value-10,771.3111,803.74
(-) Net Debt2,942.502,942.50
Equity Value-13,713.818,861.24
(/) Shares Out980.26980.26
Fair Value$-13.99$9.04
(-) Safety Margin41.64%41.64%
Buy Price$-8.16$5.28
Current Price$8.29$8.29
Upside (to Buy Price)-198.49%-36.36%

Reverse DCF: Market Implied Growth

Current Price$8.29
WACC Used9.1%
IMPLIED REVENUE GROWTH123.55%
Metric2027202820292030203120322033203420352036
Implied Revenue11,748.1026,262.5858,709.30131,243.09293,390.47655,866.671,466,172.643,277,590.287,326,966.6516,379,240.75
Constant Implied Growth123.55%123.55%123.55%123.55%123.55%123.55%123.55%123.55%123.55%123.55%
Implied Free Cash Flow1.172.635.8713.1229.3465.59146.62327.76732.701,637.92
Discount Factor0.930.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF1.092.124.348.9018.2437.3776.57156.90321.50658.76

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20192019-12-31$6.2620.34%$-47.18-853.70%
20182018-12-31$4.3243.00%$-33.50-875.49%
20172017-12-31$8.0353.06%$-1.11-113.82%
20162016-12-31$11.5944.05%$-13.71-218.32%
20152015-12-31$12.8320.63%$8.25-35.73%
20142014-12-31$8.1818.14%$-16.82-305.66%
20132013-12-31$7.41-3.03%$-10.20-237.60%
20122012-12-31$6.12-6.96%$-4.02-165.72%
20112011-12-31$7.23-5.09%$-3.83-152.92%
20102010-12-31$8.37-2.36%$1.85-77.86%
20092009-12-31$6.8714.69%$-0.88-112.76%
20082008-12-31$3.9313.34%$3.36-14.40%
20072007-12-31$5.9413.08%$3.45-41.90%
20062006-12-31$2.3812.45%$0.50-79.12%
20052005-12-31$1.46-9.00%$0.92-36.72%
20042004-12-31$2.11-18.53%$-1.03-148.64%
20032003-12-31$2.98-21.03%$-0.63-121.09%
20022002-12-31$2.76-15.43%$-1.83-166.27%
20012001-12-31$5.491.15%$1.87-66.02%
20002000-12-31$6.96-0.79%$6.05-13.09%
19991999-12-31$5.95-4.18%$-0.66-111.04%
19981998-12-31$2.941.43%$-2.06-170.10%
19971997-12-31$2.901.85%$-1.37-147.26%
19961996-12-31$3.15-1.01%$-0.72-122.86%
19951995-12-31$1.88-3.18%$-0.93-149.54%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$5.11
Median
$4.67
10th Percentile
$1.97
90th Percentile
$8.67

Fair Value Distribution

$-0.41 - $0.70
14
$0.70 - $1.82
63
$1.82 - $2.93
130
$2.93 - $4.04
193
$4.04 - $5.16
169
$5.16 - $6.27
149
$6.27 - $7.38
113
$7.38 - $8.50
60
$8.50 - $9.61
42
$9.61 - $10.73
26
$10.73 - $11.84
15
$11.84 - $12.95
10
$12.95 - $14.07
2
$14.07 - $15.18
4
$15.18 - $16.29
2
$16.29 - $17.41
4
$17.41 - $18.52
3
$18.52 - $19.63
0
$19.63 - $20.75
0
$20.75 - $21.86
1