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AUTO, a 102% higher target price
Current 1,130 Target 2,286 (+102%)
October 30th, 2021
1 minute read
Sales up 10%
Costs lower
Cashflow positive again
Balance sheet, higher leverage
Valuation, a 102% higher target price
1 minute read
Sales up 10%
- Sales grew by 10% in the third quarter to 3,889 billion rupiah which is above our forecast 3,535 billion rupiah.
- This brings the quarterly average growth to 21%
- We predict average growth of 4% in this next 12 months to bring sales to 4,508 billion rupiah in the third quarter of 2022.
Costs lower
- The cash cost ratio was lower at -95% in the third quarter & net profit almost doubled to 184 billion rupiah
- The Cashflow cost ratio is now at -93%
- We use the latest -95% cost ratio to predict a 214 billion rupiah profit in the third quarter of 2021.
Cashflow positive again
- Free cashflow was positive again at 214 billion rupiah in the third quarter with lower investment spending of -25 billion rupiah
- Average quarterly Cashflow is now at 239 billion rupiah
- We assume the same -25 billion rupiah investment spending which with higher sales gives a 198 billion rupiah Cashflow in the third quarter of 2021.
Balance sheet, higher leverage
- Cash increased from 1,702 to 1,888 billion rupiah in the third quarter.
- Liabilities increased from 4,608 to 5,047 billion rupiah so net cash worsened from -2,906 to -3,159 billion rupiah.
- With our forecast cashflow & a -241 billion rupiah equity payout net cash will be -2,665 billion rupiah in 12 months time.
Valuation, a 102% higher target price
- AUTO capital from the last six years increased slightly to 2,160 billion rupiah in the third quarter & will rise to 2,780 billion rupiah in the next 12 months.
- At the current market value of 5,446 billion rupiah, based on our forecasts, it’s at 0.33X assets with a 20 years payback & a 4% yield.
- Our cashflow forecast is 735 billion rupiah which means an 7X valuation. At a 15X valuation gives a 102% higher target price of 2,286 rupiah.
