After being inspired by Pythagerous' scrap paper valuation of SDL (http://www.hotcopper.com.au/post_threadview.asp?fid=1&tid=1349278&msgno=6156466#6156466) I decided to have a go for CCC. This is quite a rough scrap valuation of CCC's value by 2015 as far as it's future share price is concerned.
This does make sense to me and I have used one of Continental Coal's presentations (http://www.conticoal.com/uploads/media/Continental_Coal_-_September_2010_Presentation.pdf) as a source but I do understand there are more variables to be taken into consideration that may effect the future share price.
Anyhow, here it is:
Continental Coal Limited (2015):
Number of shares: 2.5 Billion (Up from the current 1.39 billion as there is the possibility that shares may need to be given out to partners/government)
Annual tonnage: 7MT (Extremely conservative given the potential for it to be greater than 10MT)
Thermal Coal Price: $100/T (Again, extremely conservative given the current supply shifts from the floods forcing the spot price to be around $130 right now and constant growing demand mainly from the BRICs and the general global economy)
Operating Margin: $30/T (Conservative as down from $35-$40 to allow for possible higher costs)
P/E Ration 10 (Conservative considering the Sectors P/E Ration is about 16, All Ordinaries is about 14, BHP 14, FMG 15, RIO 11)
Profit = 7MT x $30 = $210,000,000
EPS = $210,000,000 / 2,500,000,000 = 0.084
Share Price = P/E Ratio (10) x EPS (0.084) = $0.84
Market Capitalisation: $0.84 x 2,500,000,000 = $2,100,000,000
Even after i tried being extremely conservative with this, I am still amazed by these figures, just mind boggling. If anyone sees any holes in this valuation please speak your mind :)
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Don't base financial decisions on my advice and always DYOR
CCC Price at posting:
80.0¢ Sentiment: LT Buy Disclosure: Held
