The Discounted Cash Flow (DCF) valuation of Zhonglu Co Ltd (600818.SS) is 4.95 CNY. With the latest stock price at 11.36 CNY, the upside of Zhonglu Co Ltd based on DCF is -56.4%.

Is 600818.SS a buy or a sell?

Based on the latest price of 11.36 CNY and our DCF valuation, Zhonglu Co Ltd (600818.SS) is a sell. Selling 600818.SS stocks now will result in a potential gain of 56.4%.

	Range	Selected
WACC / Discount Rate	7.7% - 12.2%	10.0%
Long-term Growth Rate	3.0% - 5.0%	4.0%
Fair Price	3.41 - 10.18	4.95
Upside	-70.0% - -10.4%	-56.4%

11.36 CNY

Stock Price

4.95 CNY

Fair Price

REVENUE & EXPENSES

CAPEX

D&A

WORKING CAPITAL

TERMINAL VALUE

600818.SS DCF Valuation: Revenue & Expenses Forecast

(CNY in millions)		Projections

	12-2024	12-2025	12-2026	12-2027	12-2028	12-2029

Revenue	976	1,059	1,115	1,182	1,215	1,263
% Growth	0%	8%	5%	6%	3%	4%

Cost of goods sold	(828)	(854)	(854)	(860)	(840)	(829)
% of Revenue	85%	81%	77%	73%	69%	66%

Selling, G&A expenses	(135)	(146)	(154)	(163)	(168)	(174)
% of Revenue	14%	14%	14%	14%	14%	14%

Research & Development	(16)	(17)	(18)	(19)	(19)	(20)
% of Revenue	2%	2%	2%	2%	2%	2%

Net interest & other expenses	(22)	(24)	(26)	(27)	(28)	(29)
% of Revenue	2%	2%	2%	2%	2%	2%

Tax expense	(1)	(5)	(18)	(32)	(45)	(60)
Tax rate	3%	28%	28%	28%	28%	28%

Net profit	(26)	13	46	81	115	151
% Margin	-3%	1%	4%	7%	9%	12%