BAL, shares to quintuple
Target price SGD2.79
Last 12-month cashflow +Rp 1.35 trillion
February 21st,, 2021
1 minute read
1 minute read
- Sales grew a seasonally strong +27% in the second half to Rp 5.07 trillion after a -6% decline in the first half.
- Sales were 8.8% above our forecast as production grew +30%!
- Last 12 months average semester growth is at +11%. We expect average growth to accelerate to +13%, sales to reach Rp 6.49 trillion by the second half 2021.
- Cashflow was a record Rp 1.02 trillion in the second semester, up from Rp 319 billion in the first semester. This makes the average cashflow Rp 673 billion.
- Investment spending has slowed to Rp 335 billion & we use that in our forecasts which with higher sales..:
- ...gives an average semester cashflow Rp 1.02 trillion in this next 12 months.
Strong production, sales, cashflow, paying down debt, 6% yield, shares to quintuple ....
- In the balance sheet, cash increased & liabilities decreased, so net cash was better, -Rp 6.9 trillion in the second semester from -Rp 7.63 trillion in the first & -Rp 7.5 trillion a year ago.
- With our forecast for higher cashflow & a dividend payout Rp 613 billion...
- ...net cash will improve to -Rp 5.49 trillion in 12 months time.
- Net profit jumped to Rp 840 billion in the second semester up sharply from Rp 523 billion in the first semester.
- The cash costs ratio of net profit add back depreciation minus sales as a percent of sales was lower at 77%.
- We use the same 77% costs to predict a higher next 12 months profit of Rp 2.04 trillion.
- BAL has paid out capital of Rp 1.6 trillion the last six years... & rising fast.
- At the current market value of Rp 10 trillion, it’s 0.86X sales, 0.55X assets, 0.84X equity, with a 17% profitability & a 6% yield.
- Our cashflow forecast is Rp 2 trillion. At 1.6% with a large 0.4X adjustment gives a higher target price SGD2.79.