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ACST, sales to recover
🎯 🏗 📈 Rp1,642
Last 12-months cashflow -Rp 1.2 billion ⬇️

December 17th, 2020
1 minute read

Sales
Sales growth was negative for the fourth quarter in a row at -22% in the third quarter, but better than the 12 month average -38%. At Rp 212 billion, sales were 29% below our forecast. We expect a strong recovery from the fourth quarter, average growth of +30% & sales to reach Rp 763 billion by the third quarter 2021.

Cashflow
Third quarter cashflow was lower than the second quarter at -Rp 469 billion excluding working capital. That’s also much lower than our forecast Rp 88 billion. We assume investment spending status at zero (+Rp 4 billion in the third quarter). Together with higher sales this gives a positive cashflow of Rp 84 billion by the third quarter of next year:

Sales to recover, zero investment, cashflow positive next year, shares to start to rise...

Data file & model
Balance sheet
Despite the negative cashflow, working capital was positive enough to offset in the last 12 months. Together with new equity this has decreased net debt to Rp 794 billion from Rp 4 trillion last year. With more negative cashflow forecast & a small dividend of Rp 14 billion, net debt will increase to Rp 1.3 trillion in 12 months time.

Profit
The eighth quarter in a row of net loss was also the largest, -Rp 503 billion in the third quarter. The cash costs of net profit add back depreciation minus sales was at Rp 683 billion. We use the same Rp 683 billion flat cash costs to predict a much lower next 12 months loss of -Rp 572 billion.

Value
ACST net capital raised in the last five years is Rp 2.6 trillion as of the third quarter. At the current market value Rp 1.27 trillion, it’s 0.56X sales, 0.35X assets, 2.87X equity with no profitability & a 1.1% yield. Our annualized cashflow forecast is Rp 337 billion. At 1.6% with a 0.5X adjustment gives a higher target price, Rp1,542.
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