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BBCA, a 23% higher target price
Current, target price 7,525, 9,239 (+23%)
October 22nd, 2021
1 minute read
Sales grow faster
Costs remain low
1 minute read
Sales grow faster
- Sales grew faster by 2% in the third quarter to 21,946 billion rupiah which is above our forecast 21,802 billion rupiah.
- This brings the average quarterly growth to 1%.
- We predict average growth of 3% in this next 12 months to bring sales to 24,674 billion rupiah in the third quarter of 2022.
Costs remain low
- The cash cost ratio was steady at -49% in the third quarter & profit jumped to 9,405 billion rupiah with much lower provisions of 1,103 billion rupiah .
- Quarterly average costs are now at -51%.
- We use the latest -49% costs with the same -1,103 billion rupiah provisions to predict a 10,789 billion rupiah profit in the third quarter of 2022.
Cashflow doubled
Balance sheet, asset growth higher than liabilities
Value, a 23% higher target price
- Cashflow more than doubled to 19,700 billion rupiah with lower investment spending of -483 billion rupiah in the third quarter.
- Average quarterly Cashflow has now improved to 12,022 billion rupiah.
- We use the same -483 billion rupiah investment spending which with higher sales gives a slightly higher 12,037 billion rupiah cashflow in the third quarter of 2022.
Balance sheet, asset growth higher than liabilities
- Non cash assets grew by a strong 4% again in the third quarter & the quarterly average growth is now at 4%.
- Liabilities grew at a slower 3% again in the third quarter but the quarterly average growth is also at 4%.
- The sales to asset ratio was flat in the third quarter at 1.9%. This is below the average sales to asset ratio of 2%.
Value, a 23% higher target price
- BBCAA capital from the last six years was slightly lower at 56,546 billion rupiah in the third quarter but is expected to jump to 84,942 billion rupiah in 12 months time.
- At the current market value of 927,600 billion rupiah, based on our forecasts, it’s at 0.79X assets with a 3% yield.
- Our free cashflow forecast is 45,557 billion rupiah which is a 20X valuation. At a 25X valuation gives a 23% higher target price of 9,239 rupiah.
