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ACES, dividend to double
🎯 🪚 📈 Rp2,,690
Last 12-months cashflow +Rp 599 billion ⬆️

December 8th, 2020
1 minute read

Sales
After two negative growth quarters, sales increased by +9% in the third quarter from the second, bringing the 12-month average growth up to -2%. At Rp 1.83 trillion, sales were 2% below our forecast. Home sales jumped +16%, lifestyle +1%, while toys were down -4%. We forecast sales to recover back to Rp 2.23 trillion by the third quarter 2021.

Cashflow
Amazingly, the third quarter free cashflow was exactly the same as our forecast at Rp 242 billion, up from Rp 213 billion in the second quarter. We expect investment spending to remain low as it has been & with higher sales, this will give an even higher average quarterly free cashflow of Rp 283 billion in this next 12 months.

Sales jump, cashflow rising, cash has doubled, dividend to double, shares to rise...

Data file & model
Balance sheet
With stronger cashflow, including some positive working capital, the balance sheet net cash position has more than doubled. A year ago net cash was Rp 798 billion, now it’s Rp 1.75 trillion. With our forecast for higher cashflow & a higher dividend payment of Rp 607 billion, the net cash will be still higher Rp 2.28 trillion in 12 months.

Profit
Third quarter net profit was also higher at Rp 159 billion, up from Rp 110 billion in the second quarter. The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was lower again at 85%. We use the same 85% to predict the next 12 months profit rises +5% to Rp 867 billion.

Value
ACES has paid our Rp 1.96 trillion in the last five years. That will rise to Rp 2.6 trillion now. At Rp 27 trillion current value, it’s 3.17X sales, 3.76X assets, 5.29X equity with a 17% profitability & a 2.2% yield. Our cashflow forecast is Rp 1.13 trillion. At 1.6% with a 0.65X adjustment gives a higher target price Rp2,690.
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