Capital Limited (CAPD.L) | Investment Case

1. Company Snapshot

1.a. Company Description

Capital Limited, together with its subsidiaries, provides various drilling solutions to customers in the minerals industry.It offers exploration drilling services, including air core, reverse circulation, diamond core, deep hole diamond, directional, and underground diamond drilling; mineral geochemical analysis laboratory services; and grade control drilling services, such as advanced/deep grade control, shallow grade control, reverse circulation, and underground diamond drilling.The company also provides blast hole drilling services that include pre-splits, down the hole, and rotary top hammer services; load and haul, rehandling, equipment hire and maintenance, and management services; and hydraulic, general maintenance and fabrication, mining supplies, asset rentals, and asset and component rebuild services.

In addition, it offers de-watering, reverse circulation, core orientation, rig alignment, borehole management, geophysical logging, and equipment rental and IT support services.As of December 31, 2021, it operated a fleet of 109 rings, including 30 diamond core rigs,4 air core rigs,2 weep hole rigs, 8 multi-purpose rigs, 9 grade control rigs, 9 reverse circulation rigs, 31 blast hole rigs, and 16 underground rigs.The company was formerly known as Capital Drilling Limited and changed its name to Capital Limited in June 2020.

Capital Limited was founded in 2004 and is headquartered in Ebene, Mauritius.

Show Full description

1.b. Last Insights on CAPD

Negative drivers behind Capital Limited's recent 3-month performance include a sluggish earnings report, which failed to cause a significant stock movement. The company's full-year 2024 earnings missed analyst estimates, with a 2.6% decline in share price following the announcement. Additionally, the company's revenue growth of 9.3% was not enough to offset the decline in earnings per share. Furthermore, the recent weak trade data from China has highlighted the interconnectedness of global economies, potentially impacting Capital Limited's business conditions.

1.c. Company Highlights

Last Price	117
Change Percentage	-1.68%
Open	119.75
Previous Close	119
Market Cap ( Millions)	230
Volume	650524
Year High	130
Year Low	58.2
M A 50	113.56
M A 200	87.39

FCF Yield	12.32%
Dividend Yield	1.45%
ROE	8.24%
Debt / Equity	52.52%
Net Debt / EBIDTA	138.87%
Price To Book	1.07
Price Earnings Ratio	13.35
Price To FCF	8.12
Price To sales	0.91
EV / EBITDA	6.04

2. Transcript Summary

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3. NewsRoom

3 Promising UK Penny Stocks With Market Caps Under £300M

Dec -02

Source:

Capital Limited (LON:CAPD) Shares Could Be 30% Below Their Intrinsic Value Estimate

Nov -17

Source:

Yunqi Capital Applauds STAAR Surgical’s Strong Third Quarter Results and Reiterates That the Proposed Sale to Alcon Should Be Terminated

Nov -06

Source:

Yunqi Capital Issues Letter to STAAR Surgical Board Opposing Adjournment of the Special Meeting and Calling for the Company to Move Beyond the Proposed Merger with Alcon

Oct -24

Source:

3 UK Penny Stocks With Market Caps Under £400M To Watch

Oct -14

Source:

Yunqi Capital, One of STAAR Surgical Company’s Largest Shareholders, Reiterates Its Opposition to the Proposed Merger with Alcon

Oct -06

Source:

3 Promising UK Penny Stocks With Market Caps Up To £400M

Sep -15

Source:

Here's What We Like About Capital's (LON:CAPD) Upcoming Dividend

Aug -24

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.52%)

6. Segments

Drilling

Expected Growth: 5.5%

Drilling from Capital Limited's 5.5% growth is driven by increasing demand for oil and gas, strategic expansion into new markets, and improved operational efficiency. Additionally, investments in technology and equipment upgrades have enhanced productivity, while a strong balance sheet and effective cost management have supported profitability.

Mining

Expected Growth: 5.8%

Capital Limited's 5.8% growth in Mining is driven by increasing demand for metals and minerals, fueled by infrastructure development and renewable energy projects. Rising commodity prices, improved operational efficiencies, and strategic acquisitions also contribute to this growth.

Laboratory

Expected Growth: 5.2%

Laboratory from Capital Limited's 5.2% growth is driven by increasing demand for diagnostic services, expansion into new markets, and strategic partnerships. Additionally, investments in digital healthcare and precision medicine are contributing to the company's growth. Furthermore, the company's focus on research and development, as well as its cost-effective business model, are also key factors in its growth.

Surveying

Expected Growth: 5.6%

Surveying from Capital Limited's 5.6% growth is driven by increasing infrastructure development, government investments in construction projects, and rising demand for precise mapping and monitoring technologies. Additionally, the company's strategic expansion into new markets, cost-effective services, and innovative solutions have contributed to its growth momentum.

7. Detailed Products

Investment Banking

Capital Limited's investment banking division provides strategic advisory services to clients, including mergers and acquisitions, equity and debt capital markets, and restructuring.

Wealth Management

Capital Limited's wealth management division offers personalized investment advice and portfolio management services to high net worth individuals and families.

Markets and Securities

Capital Limited's markets and securities division provides trading and execution services in equities, fixed income, currencies, and commodities.

Transaction Banking

Capital Limited's transaction banking division provides cash management, trade finance, and securities services to corporate clients.

Risk Management

Capital Limited's risk management division provides risk advisory services to clients, including market risk, credit risk, and operational risk management.

8. Capital Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Porter Capital Limited is medium due to the presence of alternative investment options available to customers.

Bargaining Power Of Customers

The bargaining power of customers is low for Porter Capital Limited as customers have limited negotiating power due to the company's strong brand reputation and diversified product offerings.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Porter Capital Limited as the company relies on a diverse range of suppliers, reducing dependence on any one supplier.

Threat Of New Entrants

The threat of new entrants is high for Porter Capital Limited due to the relatively low barriers to entry in the financial services industry, making it easier for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry is high for Porter Capital Limited due to the highly competitive nature of the financial services industry, with many established players competing for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	33.35%
Debt Cost	6.91%
Equity Weight	66.65%
Equity Cost	6.91%
WACC	6.91%
Leverage	50.03%

11. Quality Control: Capital Limited passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Alphamin Resources

A-Score: 5.8/10

Value: 6.0

Growth: 9.0

Quality: 8.0

Yield: 9.4

Momentum: 2.0

Volatility: 0.7

1-Year Total Return ->

Capital

A-Score: 5.5/10

Value: 7.6

Growth: 6.6

Quality: 4.9

Yield: 4.4

Momentum: 7.5

Volatility: 2.3

1-Year Total Return ->

Kenmare Resources

A-Score: 5.2/10

Value: 9.4

Growth: 6.1

Quality: 2.8

Yield: 9.4

Momentum: 2.0

Volatility: 1.7

1-Year Total Return ->

Griffin Mining

A-Score: 4.1/10

Value: 3.7

Growth: 5.1

Quality: 6.9

Yield: 0.0

Momentum: 7.0

Volatility: 1.7

1-Year Total Return ->

Foraco

A-Score: 3.9/10

Value: 7.4

Growth: 5.0

Quality: 4.9

Yield: 0.0

Momentum: 3.5

Volatility: 2.7

1-Year Total Return ->

Ferroglobe

A-Score: 2.8/10

Value: 5.0

Growth: 4.8

Quality: 1.6

Yield: 0.6

Momentum: 4.0

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-5.87%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.91%

Capital Limited - BMG022411000

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CAPD

1.c. Company Highlights

Higher Growth

Average Quality

Fairly Valued

Revenues Beats

Stable Momentum

Average Growth

Average Yield

Cheaper

Earnings Miss

Weak Momentum

Medium Volatility

Earnings Beats

Revenues Miss

Strong Momentum

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.52%)

6. Segments

Drilling

Expected Growth: 5.5%

Mining

Expected Growth: 5.8%

Laboratory

Expected Growth: 5.2%

Surveying

Expected Growth: 5.6%

7. Detailed Products

Investment Banking

Wealth Management

Markets and Securities

Transaction Banking

Risk Management

8. Capital Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Capital Limited passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.17$

Current Price

1.17$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA