Scully Royalty Ltd. (SRL) | Investment Case

1. Company Snapshot

1.a. Company Description

Scully Royalty Ltd.operates as an iron ore mining company in the Americas, Africa, Canada, Asia, and Europe.It operates through three segments: Royalty, Industrial, and Merchant Banking.

The company holds royalty interest in the Scully iron ore mine located in the Province of Newfoundland and Labrador, Canada.It also engages in manufacturing, and medical supplies and services industries.The company was formerly known as MFC Bancorp Ltd.

and changed its name to Scully Royalty Ltd.in June 2019.Scully Royalty Ltd.

was incorporated in 2017 and is based in Central, Hong Kong.

Show Full description

1.b. Last Insights on SRL

Scully Royalty Ltd.'s recent positive drivers include the filing of its half-year report, which provided a corporate update and declared a cash dividend, demonstrating the company's commitment to shareholder value. Additionally, the company's association with Salazar Resources, which recently announced a private placement financing and the purchase of Ecuadorian exploration properties from Silvercorp Metals Inc., may lead to potential growth opportunities.

1.c. Company Highlights

Last Price	6
Change Percentage	0.17%
Open	5.87
Previous Close	5.99
Market Cap ( Millions)	89
Volume	12443
Year High	9.99
Year Low	5.13
M A 50	5.91
M A 200	6.47

FCF Yield	-25.75%
Dividend Yield	4.33%
ROE	-6.79%
Debt / Equity	12.09%
Net Debt / EBIDTA	-187.91%
Price To Book	0.41
Price Earnings Ratio	-5.97
Price To FCF	-3.88
Price To sales	3.48
EV / EBITDA	-15.08

2. Transcript Summary

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3. NewsRoom

Salazar Resources Announces Private Placement

Dec -03

Source: newsfilecorp.com

Salazar Signs Definitive Agreement for the Purchase of Ecuadorian Exploration Properties from Silvercorp Metals Inc.

Jul -28

Source: newsfilecorp.com

Salazar Comments on New Ecuadorian Mining Inspection Fee

Jun -19

Source: newsfilecorp.com

SCULLY ROYALTY FILES ITS 2024 ANNUAL REPORT ON FORM 20-F

Apr -30

Source: prnewswire.com

Salazar Resources Announces Initial Closing of Private Placement

Jan -09

Source: newsfilecorp.com

SCULLY ROYALTY FILES ITS REPORT FOR THE SIX MONTHS ENDED JUNE 30, 2024, PROVIDES CORPORATE UPDATE AND DECLARES CASH DIVIDEND

Dec -31

Source: prnewswire.com

Salazar Resources Announces Private Placement

Dec -24

Source: newsfilecorp.com

Salazar Resources Announces Purchase of Ecuadorian Exploration Properties from Silvercorp Metals Inc.

Dec -23

Source: newsfilecorp.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Royalty

Expected Growth: 4.5%

Increasing global energy demand, rising oil and gas prices, and Scully Royalty Ltd's diversified portfolio of oil and gas properties drive growth. The company's royalty model provides a stable revenue stream, while its strategic partnerships and acquisitions further boost growth prospects.

Industrial

Expected Growth: 4.5%

The industrial segment of Scully Royalty Ltd. is expected to grow driven by increasing demand for industrial automation, rising adoption of Industry 4.0 technologies, and growing need for efficient production processes across various industries.

Merchant Banking

Expected Growth: 8.5%

Growing demand for strategic transactions and investments, increasing need for financial advisory services, and expansion of businesses into new markets drive the growth of the merchant banking segment.

7. Detailed Products

Oil and Gas Royalties

Scully Royalty Ltd. offers oil and gas royalties to investors, providing a steady stream of income through ownership of oil and gas wells.

Mineral Rights

The company provides mineral rights to landowners, allowing them to monetize their mineral-rich land.

Land Management Services

Scully Royalty Ltd. offers land management services, including lease negotiation and royalty management, to oil and gas operators.

Royalty Acquisition

The company acquires and manages oil and gas royalties on behalf of investors, providing a diversified portfolio of royalties.

Consulting Services

Scully Royalty Ltd. offers consulting services to oil and gas companies, providing expertise in land management and royalty management.

8. Scully Royalty Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Scully Royalty Ltd. is medium due to the availability of alternative products in the market.

Bargaining Power Of Customers

The bargaining power of customers for Scully Royalty Ltd. is high due to the concentration of buyers in the market.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Scully Royalty Ltd. is low due to the availability of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants for Scully Royalty Ltd. is medium due to the moderate barriers to entry in the market.

Intensity Of Rivalry

The intensity of rivalry for Scully Royalty Ltd. is high due to the high level of competition in the market.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	12.01%
Debt Cost	9.65%
Equity Weight	87.99%
Equity Cost	9.65%
WACC	9.65%
Leverage	13.65%

11. Quality Control: Scully Royalty Ltd. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

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

XTB

A-Score: 7.8/10

Value: 5.4

Growth: 9.8

Quality: 9.4

Yield: 10.0

Momentum: 8.0

Volatility: 4.3

1-Year Total Return ->

Tradition

A-Score: 6.5/10

Value: 3.4

Growth: 5.2

Quality: 7.0

Yield: 5.0

Momentum: 10.0

Volatility: 8.3

1-Year Total Return ->

Scully Royalty

A-Score: 5.8/10

Value: 8.2

Growth: 1.6

Quality: 4.9

Yield: 8.3

Momentum: 4.0

Volatility: 8.0

1-Year Total Return ->

Mawson Infrastructure

A-Score: 4.4/10

Value: 9.4

Growth: 6.0

Quality: 6.2

Yield: 0.0

Momentum: 3.0

Volatility: 1.7

1-Year Total Return ->

Magic Empire Global

A-Score: 3.7/10

Value: 6.3

Growth: 2.9

Quality: 3.8

Yield: 1.7

Momentum: 5.0

Volatility: 2.3

1-Year Total Return ->

TOP Financial Group

A-Score: 3.5/10

Value: 7.0

Growth: 1.3

Quality: 3.6

Yield: 0.0

Momentum: 5.5

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

17.62%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.65%

Scully Royalty Ltd. - KYG7T96K1077

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on SRL

1.c. Company Highlights

Fairly Valued

Average Yield

Average Quality

Medium Volatility

Stable Momentum

Strong Momentum

Revenues Miss

Higher Yield

Lower Growth

Less Volatile

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.00%)

6. Segments

Royalty

Expected Growth: 4.5%

Industrial

Expected Growth: 4.5%

Merchant Banking

Expected Growth: 8.5%

7. Detailed Products

Oil and Gas Royalties

Mineral Rights

Land Management Services

Royalty Acquisition

Consulting Services

8. Scully Royalty Ltd.'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: Scully Royalty Ltd. passed 7 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

6.0$

Current Price

6$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA