## BBCA, sales below target

Target price Rp42,158

Last 12-month cashflow +Rp 6.8 trillion

February 10th,, 2021

1 minute read

Sales

Sales increased +3% in the fourth quarter to Rp 21.6 trillion, after +1% growth in the third, that’s 9% below our forecast. Other income grew faster & caught up with interest from loans! Average quarterly growth is -1%. We expect growth to turn positive +3% this next 12 months, sales to reach Rp 24.6 trillion by the fourth quarter 2021.

Cashflow

Cashflow was a stronger Rp 14.5 trillion in the fourth quarter after Rp 903 billion in the third & Rp 283 billion in the second quarter. Average quarterly Cashflow is Rp 1.7 trillion. We use average investment cashflow of Rp 4.9 trillion, which combined with higher sales gives an average quarterly free cashflow Rp 4.9 trillion this next 12 months.

1 minute read

Sales

Sales increased +3% in the fourth quarter to Rp 21.6 trillion, after +1% growth in the third, that’s 9% below our forecast. Other income grew faster & caught up with interest from loans! Average quarterly growth is -1%. We expect growth to turn positive +3% this next 12 months, sales to reach Rp 24.6 trillion by the fourth quarter 2021.

Cashflow

Cashflow was a stronger Rp 14.5 trillion in the fourth quarter after Rp 903 billion in the third & Rp 283 billion in the second quarter. Average quarterly Cashflow is Rp 1.7 trillion. We use average investment cashflow of Rp 4.9 trillion, which combined with higher sales gives an average quarterly free cashflow Rp 4.9 trillion this next 12 months.

## Sales disappoint, but expecting faster growth, stronger cashflow, yield already 1.8%, slightly higher target price ...

Balance sheet

Non cash asset growth was stronger in the fourth quarter at +6%, up from +3% in the third quarter & +1% in the second quarter. This brings the average quarterly asset growth up to 4%. The sales to asset ratio however stayed the same as the third quarter record low 2.1%, down from 2.5% at the end of last year.

Profit

Net profit was lower at Rp 7.1 trillion in the fourth quarter, down from Rp 7.8 trillion in the third quarter. The cash costs ratio of net profit add depreciation & provisions minus sales as a percent of sales was higher again, 52%. We use the average 58% costs to predict a next 12 months profit of Rp 26.4 trillion.

Value

BBCA has paid Rp 45.3 trillion of capital in the last six years. At the current market value of Rp 860 trillion, its 20X capital paid, 9X sales, 0.18X other assets, 4.4X equity with a 13.5% profitability & a 1.8% yield. Our cashflow forecast is Rp 19.6 trillion. At 1.6% with a 0.85X adjustment gives a higher target price, Rp42,158.

Non cash asset growth was stronger in the fourth quarter at +6%, up from +3% in the third quarter & +1% in the second quarter. This brings the average quarterly asset growth up to 4%. The sales to asset ratio however stayed the same as the third quarter record low 2.1%, down from 2.5% at the end of last year.

Profit

Net profit was lower at Rp 7.1 trillion in the fourth quarter, down from Rp 7.8 trillion in the third quarter. The cash costs ratio of net profit add depreciation & provisions minus sales as a percent of sales was higher again, 52%. We use the average 58% costs to predict a next 12 months profit of Rp 26.4 trillion.

Value

BBCA has paid Rp 45.3 trillion of capital in the last six years. At the current market value of Rp 860 trillion, its 20X capital paid, 9X sales, 0.18X other assets, 4.4X equity with a 13.5% profitability & a 1.8% yield. Our cashflow forecast is Rp 19.6 trillion. At 1.6% with a 0.85X adjustment gives a higher target price, Rp42,158.