Discounted Cash Flow (DCF) Analysis Unlevered

Turquoise Hill Resources Ltd. (TRQ)

$31.41

0.00 (0.00%)

All numbers are in Millions, Currency in USD

Stock DCF: -504.82 | 31.41 | overvalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	939.78	1,180.02	1,166.01	1,078.19	1,971.04	2,462.10	3,075.50	3,841.72	4,798.83	5,994.40
Revenue (%)
EBITDA	483.34	529.17	203.39	283.46	1,004.27	940.33	1,174.59	1,467.23	1,832.77	2,289.38
EBITDA (%)
EBIT	175.73	317.97	11.34	102.20	838.91	485.81	606.85	758.04	946.89	1,182.80
EBIT (%)
Depreciation	307.60	211.20	192.05	181.26	165.37	454.51	567.75	709.19	885.88	1,106.59
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	1,444.78	1,603.07	1,651.98	1,123.62	694.41	2,810.28	3,510.43	4,385.01	5,477.47	6,842.11
Total Cash (%)
Account Receivables	1,396.68	1,650.34	538.33	60.01	16.12	1,679.28	2,097.65	2,620.25	3,273.05	4,088.49
Account Receivables (%)
Inventories	274.14	242.97	175.72	197.96	290.02	482.11	602.22	752.25	939.67	1,173.77
Inventories (%)
Accounts Payable	360.70	395.88	389.48	315.57	320.79	742.94	928.04	1,159.24	1,448.06	1,808.82
Accounts Payable (%)
Capital Expenditure	-917.54	-1,304.35	-1,308.07	-1,080.52	-996.92	-2,320.02	-2,898.02	-3,620.03	-4,521.91	-5,648.48
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 31.41
Beta	1.551
Diluted Shares Outstanding	201.23
Cost of Debt
Tax Rate	47.14
After-tax Cost of Debt	0.03%
Risk-Free Rate
Market Risk Premium
Cost of Equity	10.874
Total Debt	4,182.78
Total Equity	6,320.67
Total Capital	10,503.44
Debt Weighting	39.82
Equity Weighting	60.18
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	939.78	1,180.02	1,166.01	1,078.19	1,971.04	2,462.10	3,075.50	3,841.72	4,798.83	5,994.40
EBITDA	483.34	529.17	203.39	283.46	1,004.27	940.33	1,174.59	1,467.23	1,832.77	2,289.38
EBIT	175.73	317.97	11.34	102.20	838.91	485.81	606.85	758.04	946.89	1,182.80
Tax Rate	520.67%	-62.13%	52.95%	-115.83%	47.14%	88.56%	88.56%	88.56%	88.56%	88.56%
EBIAT	-739.26	515.51	5.33	220.59	443.48	55.57	69.42	86.71	108.31	135.30
Depreciation	307.60	211.20	192.05	181.26	165.37	454.51	567.75	709.19	885.88	1,106.59
Accounts Receivable	-	-253.66	1,112.01	478.32	43.89	-1,663.16	-418.37	-522.60	-652.80	-815.44
Inventories	-	31.17	67.25	-22.24	-92.06	-192.09	-120.11	-150.03	-187.41	-234.11
Accounts Payable	-	35.19	-6.41	-73.91	5.22	422.15	185.09	231.21	288.81	360.76
Capital Expenditure	-917.54	-1,304.35	-1,308.07	-1,080.52	-996.92	-2,320.02	-2,898.02	-3,620.03	-4,521.91	-5,648.48
UFCF	-1,349.19	-764.94	62.16	-296.50	-431.01	-3,243.04	-2,614.25	-3,265.55	-4,079.12	-5,095.38
WACC
PV UFCF						-3,043.68	-2,302.71	-2,699.58	-3,164.85	-3,710.30
SUM PV UFCF										-14,921.11

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	6.55
Free cash flow (t + 1)	-5,197.28
Terminal Value	-114,226.03
Present Value of Terminal Value	-83,175.96

Intrinsic Value

Enterprise Value	-98,097.07
Net Debt	3,488.48
Equity Value	-101,585.55
Shares Outstanding	201.23
Equity Value Per Share	-504.82