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ACST, sales finally grow
Target price Rp565
Last 12-month cashflow +Rp 1.52 trillion

February 25th,, 2021
1 minute read

Sales
  • Sales finally increased by 14% in the fourth quarter to Rp 243 billion after -22% in the third quarter, -43% in the second quarter.
  • Sales were still far, 40% below our forecast.
  • Average quarterly growth is at -24%. We expect the average growth to turn positive +31% & sales to reach Rp 704 billion by the fourth quarter of 2021.

Cashflow
  • Cashflow was still negative -Rp 217 billion in the fourth quarter after -Rp 308 billion in the third quarter.
  • Average quarterly Cashflow is positive +Rp 380 billion because of working capital.
  • Investment spending is close to zero. We expect this to continue & with higher sales, average quarterly Cashflow in this next 12 months will be positive +Rp 20 billion.

Sales finally grow, expecting higher sales, positive margins, some cashflow & a higher target price...

Balance sheet
  • The balance sheet net of cash minus total liabilities improved to -Rp 2.65 trillion in the fourth quarter from -Rp 2.7 trillion in the third quarter & -Rp 10 trillion a year ago.
  • With our forecast for some positive free cashflow & assuming there is no dividend payout...
  • ...net cash will be at -Rp 2.58 trillion in 12 months time.

Profit
  • The net loss was -Rp 587 billion in the fourth quarter up from -Rp 503 billion in the third quarter.
  • The cash costs ratio of net profit add back depreciation minus sales as a percent of sales was at 328%!
  • We used 96% costs as sales recover to predict a smaller next 12 months net loss of Rp 47 billion.

Value
  • ACST has raised Rp 2.79 trillion of capital in the last six years.
  • At the current market value of Rp 2 trillion, it’s at 1X sales, 0.69X assets, 7.3X equity with no profitability or yield yet.
  • Our (fourth quarter annualized) Cashflow forecast is Rp 116 billion. At 1.6% with a 0.5X adjustment, this gives a higher target price of Rp565.