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ACES
ACES, rising cash pile
🎯 🛒 📈 Rp2.777
Last 12 months free cashflow +Rp556bn ⬇️
August 22nd, 2020
⏰ 1 minute read
⏰ 1 minute read
Watch the 3 minute explainer using the data file & model ⬇️
Sales
Sales growth was lower at -19% compared to a year ago in the 2Q which is lower compared to our -13% forecast; the first quarter of negative growth since 2016. Home sales were down -7%, lifestyle -12% toys increased +43%. We expect a recovery from the 3Q onwards which results in 5.4% growth in the next 12 months to Rp8.26tn.
Cashflow
Cashflow in the 2Q was strong at Rp213bn excluding working capital, bringing the last 12 months average quarterly cashflow to Rp139bn. Cashflow has bounced back after a weak end to 2019. With our forecast for sales growth & low investment the next 12 months, we also get a much higher next 12 months average free cashflow of Rp271bn per quarter.
Sales growth was lower at -19% compared to a year ago in the 2Q which is lower compared to our -13% forecast; the first quarter of negative growth since 2016. Home sales were down -7%, lifestyle -12% toys increased +43%. We expect a recovery from the 3Q onwards which results in 5.4% growth in the next 12 months to Rp8.26tn.
Cashflow
Cashflow in the 2Q was strong at Rp213bn excluding working capital, bringing the last 12 months average quarterly cashflow to Rp139bn. Cashflow has bounced back after a weak end to 2019. With our forecast for sales growth & low investment the next 12 months, we also get a much higher next 12 months average free cashflow of Rp271bn per quarter.
Sales recovery, record cashflow, cash rising, more payouts, shares to surge...
Balance sheet
The balance sheet is in net cash because of the previous positive cashflow. Because of some strong recent working capital, net cash has increased significantly since mid 2019 & was at Rp1.65tn as of the 2Q. With our forecast for positive cashflow ahead & a higher Rp724bn dividend payout, the next 12 months net cash will be higher at Rp2.05tn.
Profit
While the sales decline, profit was also lower by -54% compared to a year ago. The cash cost ratio of net profit add depreciation minus sales as a % of sales was naturally higher at 87% bringing the last 12 months ratio to 85%. With sales recovering, we use 85% to predict a +7% next 12 months profit of Rp971bn.
Value
ACES current market value is at Rp27.6tn. That’s 3.34X our sales forecast, 3.76X the value of the total assets & 5.26X the equity with a profitability of 18.5%. That’s fairly valued. Yield is forecast at 2.6%. We use our 1.6% cashflow valuation with a 30% discount because of the growing cash which gives a much higher target price of Rp2,777.
The balance sheet is in net cash because of the previous positive cashflow. Because of some strong recent working capital, net cash has increased significantly since mid 2019 & was at Rp1.65tn as of the 2Q. With our forecast for positive cashflow ahead & a higher Rp724bn dividend payout, the next 12 months net cash will be higher at Rp2.05tn.
Profit
While the sales decline, profit was also lower by -54% compared to a year ago. The cash cost ratio of net profit add depreciation minus sales as a % of sales was naturally higher at 87% bringing the last 12 months ratio to 85%. With sales recovering, we use 85% to predict a +7% next 12 months profit of Rp971bn.
Value
ACES current market value is at Rp27.6tn. That’s 3.34X our sales forecast, 3.76X the value of the total assets & 5.26X the equity with a profitability of 18.5%. That’s fairly valued. Yield is forecast at 2.6%. We use our 1.6% cashflow valuation with a 30% discount because of the growing cash which gives a much higher target price of Rp2,777.
