Picture
Other stocks here

BBRI, sales to asset ratio rising & a 3.7% yield
Current, target price 4,060, 6,560 (+62%)

May 26th, 2021
1 minute read

Sales, up unseasonably
  • Sales increased unseasonably by 1% in the first quarter to 39,588 billion rupiah, which is +0.3% compared to our forecast.
  • This is after a 6% increase in the fourth quarter & brings the quarterly average growth to 1%.
  • We predict average growth of 2% a quarter in this next 12 months which will bring sales to 43,149 billion rupiah by the first quarter of 2022.

Cashflow, negative, to turn positive
  • Cashflow was negative -18,012 billion rupiah in the first quarter after positive 19,689 billion rupiah in the fourth quarter.
  • Average quarterly cashflow is now negative -4,575 billion rupiah.
  • We use average investment Cashflow of -8,917 billion rupiah, which with higher sales, gives a positive average quarterly cashflow of 7,977 billion rupiah in this next 12 months.

Sales up un seasonally as the sales to asset ratio rises, expecting Cashflow to turn positive, a 3.7% yield, higher target price…

Balance sheet, higher sales to assets ratio
  • Non cash asset growth was negative -5.9% in the first quarter, after +3.6% in the fourth quarter. Average quarterly growth is now at +1.1%.
  • The sales to assets ratio was up to 2.8% in the first quarter from 2.6% in the fourth quarter & a 12 month average of 2.6%.
  • We use +0.8% average asset growth & a 2.8% sales to assets in our forecasts.

Profit, lower provisions
  • Net profit was higher at 6,860 billion rupiah in the first quarter from 4,507 billion rupiah in the fourth quarter.
  • Provisions were lower at -8,600 billion rupiah, the cash costs ratio of net profit add non-cash costs minus sales as a percent of sales was up to -59%%.
  • We use the same -8,600 billion rupiah provisions, & higher -60% costs to predict a much higher next 12 months profit, 30,513 billion rupiah.

Value, a 3.7% yield
  • BBRI cumulative net capital is at 44,850 billion rupiah from the last six years.
  • At the current market value of 493,700 billion rupiah, based on forecasts it’s 7.82X capital paid, 2.89X sales, 0.33X assets, 2.39X equity, with a 14.7% profitability & a 3.7% yield.
  • Our free cashflow forecast is 31,910 billion rupiah. At 1.6% with a 0.4X adjustment, gives a 62% higher target price of 6,560 rupiah.