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BBCA, building up for a recovery
🎯 💰 📈 Rp45,500
Last 12-month cashflow +Rp2,946bn ⬇️
October 29th, 2020
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Sales
Sales growth was -3% in the 3Q after 0% growth in the 2Q. At Rp21.1tn, sales were 5% below our forecast, but up +1% from the 2Q. Interest from loans was down -6% from the 2Q while other revenue was up +11%. Asset growth sales to assets are recovering & we predict sales +7.8% in this next 12 months, Rp946bn.6tn.
Cashflow
Cashflow recovered to Rp903bn in the 3Q, up from Rp283bn in the 2Q, but still below our forecast. Investment cashflow has been negative because of higher investments, but this is now reversing & we expect more positive investment cashflow ahead which when combined with the sales recovery will mean an average quarterly cashflow of lRp5,621bn in this next 12 months.
Sales growth was -3% in the 3Q after 0% growth in the 2Q. At Rp21.1tn, sales were 5% below our forecast, but up +1% from the 2Q. Interest from loans was down -6% from the 2Q while other revenue was up +11%. Asset growth sales to assets are recovering & we predict sales +7.8% in this next 12 months, Rp946bn.6tn.
Cashflow
Cashflow recovered to Rp903bn in the 3Q, up from Rp283bn in the 2Q, but still below our forecast. Investment cashflow has been negative because of higher investments, but this is now reversing & we expect more positive investment cashflow ahead which when combined with the sales recovery will mean an average quarterly cashflow of lRp5,621bn in this next 12 months.
Sales to recover, cash flow too, provisions declining, payouts to jump, higher shares...
Balance sheet
In the balance sheet, growth of the short term assets other than cash which is what creates the sales increased again from a low of +1% in the 2Q to +3% in the 3Q. this is back on track & will drive faster sales growth. We expect these other short term assets to grow 3% in this next 12 months.
Profit
While sales increased +1% from the 2Q, net profit jumped +38% as provisions fell by -40%. The cash cost ratio of net profit add back depreciation & provisions minus sales as a % of sales fell to a low 46%. We expect this to rise back to 56% which will mean a profit of Rp30.6th in this next 12 months.
Value
BBCA has been paying out capital, Rp42.95tn as of the 3Q. We predict payments will now jump to Rp61.3tn. At Rp713.77tn it’s 16.6X capital paid, 7.55x sales, 0.68x non cash assets, 3.73x equity with a 16% profitability & 2.6% yield. Our cashflow forecast is Rp22.49tn. At 1.6% with a 0.8x adjustment this gives a revised higher target price of Rp457bn,600.
In the balance sheet, growth of the short term assets other than cash which is what creates the sales increased again from a low of +1% in the 2Q to +3% in the 3Q. this is back on track & will drive faster sales growth. We expect these other short term assets to grow 3% in this next 12 months.
Profit
While sales increased +1% from the 2Q, net profit jumped +38% as provisions fell by -40%. The cash cost ratio of net profit add back depreciation & provisions minus sales as a % of sales fell to a low 46%. We expect this to rise back to 56% which will mean a profit of Rp30.6th in this next 12 months.
Value
BBCA has been paying out capital, Rp42.95tn as of the 3Q. We predict payments will now jump to Rp61.3tn. At Rp713.77tn it’s 16.6X capital paid, 7.55x sales, 0.68x non cash assets, 3.73x equity with a 16% profitability & 2.6% yield. Our cashflow forecast is Rp22.49tn. At 1.6% with a 0.8x adjustment this gives a revised higher target price of Rp457bn,600.
