AALI, sales are surging
Target price Rp30,468
Last 12-month cashflow +Rp903 billion
February 24th,, 2021
1 minute read
1 minute read
- Sales jumped 29% in the fourth quarter to Rp 5.48 trillion after a -1% decline in the third quarter, -11% in the second.
- Sales were 14% ahead of our forecast.
- Average quarterly growth is at 3%. We expect average growth to rise to 4% in the next 12 months & sales to reach Rp 6.29 trillion by fourth quarter 2021.
- Cashflow was negative again -Rp 739 billion, from working capital, after +Rp 663 billion in the third quarter.
- The average quarterly Cashflow is Rp 226 billion.
- Investment spending was higher, Rp 382 billion. We use Rp 193 billion spending in our forecast, which with higher sales gives a higher average quarterly Cashflow Rp 469 billion in this next 12 months.
Strong sales, but negative cashflow, expecting Cashflow back to positive, turning capital payer, shares to Rp30,000....
- Because of negative cashflow, net cash minus total liabilities was worse at -Rp 7.55 trillion in the fourth quarter from -Rp 6.97 trillion in the third quarter, -Rp 7.6 trillion a year ago.
- With our forecast higher free cashflow & assuming a dividend payout of Rp 408 billion...
- ...net cash will improve to -Rp 6.1 trillion in 12 months time.
- Net profit was up to Rp 275 billion in the fourth quarter from Rp 211 billion in the third quarter.
- The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was flat at 89%.
- We use the same 89% costs to predict a higher next 12 months net profit of Rp 1.35 trillion.
- AALI has raised capital of Rp 735 billion in the last six years, but will turn payer.
- At the current market value Rp 20.3 trillion, it’s 0.87X sales, 0.74X assets, 1X equity with a 6.7% profitability & a 2% yield.
- Our cashflow forecast is Rp 1.88 trillion. At 1.6% with a 0.5X adjustment, gives a higher target price of Rp30,468.