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ADES, a 13% yield
Current, target price 1,790, 8,837 (+394%)
June 28th, 2021
1 minute read
Sales, down seasonally
Costs, strong margins
1 minute read
Sales, down seasonally
- Sales declined by -2% in the first quarter to 185 billion rupiah, which is below our forecast of 191 billion rupiah.
- This brings the average quarterly growth to 2%.
- We predict slightly faster average growth of 3% which will bring sales to 207 billion rupiah by the first quarter of 2022.
Costs, strong margins
- The cash cost ratio of net profit add non cash costs minus sales as a percent of sales was -68% in the first quarter & profit was 48 billion rupiah.
- Average quarterly costs are now at -70%.
- We use the -68% costs to predict a net profit of 55 billion rupiah by the first quarter of 2022.
Cashflow, steady above 50 billion
Balance sheet, higher cash…
Value, so a 13% yield
- Free cashflow was lower in the first quarter at 58 billion rupiah with higher investment spending of -13 billion rupiah.
- Average quarterly cashflow is now at 53 billion rupiah.
- We use the same investment spending of -13 billion rupiah which with higher sales gives a 52 billion rupiah cashflow in the first quarter 2022.
Balance sheet, higher cash…
- With positive cashflow, cash increased from 338 to 396 billion rupiah in the first quarter.
- Liabilities increased from 259 to 269 billion rupiah, but net cash improved from 79 to 127 billion rupiah.
Value, so a 13% yield
- ADES capital from the last five years will jump to 335 billion rupiah in 12 months time.
- At the current market value 1,056 billion rupiah, based on our forecasts, it’s at 1.3X sales, 1.0X assets with a 13% yield…
- Our cashflow forecast is 209 billion rupiah. At 25X (4% yield)m this gives a 394% higher target price 8,837 rupiah.
