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AUTO, only 1.99X capital paid
Target price Rp4,111
Last 12-months cashflow +Rp 1.06 trillion

March 12th,, 2021
​1 minute read

Sales

• Sales increased another 9% in the fourth quarter to Rp 3.24 trillion after a 64% jump in the third quarter, but a -53% decline in the second quarter.
• This makes average quarterly growth 5%.
• We expect the same average 5% quarterly growth in this next 12 months & sales to return to Rp 3.97 trillion by the fourth quarter 2021.

Cashflow

• Cashflow was Rp 335 billion in the fourth quarter from a record Rp 686 billion in the third quarter. T
• he average quarterly Cashflow is Rp 265 billion.
• After two quarters of investment gains, we use average investment spending of Rp 56 billion, which with higher sales gives a quarterly average cashflow of Rp 198 billion in this next 12 months.

Sales recovering, record cashflow, de leveraging, only 1.99X capital paid, shares to return to Rp4k...

Data file & model

Balance sheet

• With positive cashflow, the balance sheet leverage of cash minus total liabilities was -Rp 2.4 trillion in the fourth quarter from -Rp 2.9 trillion in the third quarter & -Rp 3.6 trillion a year ago.
• With our forecast positive free cashflow & o dividend Rp 252 billion ...
• ...the net cash will improve further to -Rp 1.9 trillion in 12 months time.

Profit

• Net profit was Rp 250 billion in the fourth quarter up from Rp 49 billion in the third quarter as JV income was positive again.
• The cash cost ratio of net profit add depreciation minus sales as a percent of sales was 93%.
• We use the same 93% to predict a positive next 12 months met profit, Rp 507 billion.

Value

• AUTO has paid out capital of Rp 2.7 trillion the last five years.
• At the current market value of Rp 5.3 trillion, it’s only 2X capital paid, 0.4X sales, 0.4X assets, 0.5X equity with a 4% profitability & 4.8% yield.
• Our cashflow forecast is Rp 793 billion . At 1.6% with a 0.4X adjustment, gives a higher target price of Rp4,111.