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BKSL, money has to be made
🎯 🏡 📈 Rp36
Last 12 months cashflow -Rp2,278 ⬆️
October 2nd, 2020
⏰ 1 minute read
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Sales
Sales growth in the 2Q was -73%, the 8th negative growth quarter in 10 since the beginning of 2018. Real estate sales declined an even larger -85%. Sales were 80% below our forecast... With sales just Rp47bn in the 2Q compared to Rp113bn in the 1Q & Rp411bn in the 4Q we expect a recovery to Rp101bn by 2Q 2021.
Cashflow
Amazingly, despite the huge drop in sales, the cashflow was slightly less negative than a year ago at -Rp87bn in the 2Q when we exclude the positive working capital. We assume there’s no investment spending in the next 12 months, a slight recovery in sales & a positive margin again, which gives a positive average quarterly free cashflow of Rp10bm.
Sales growth in the 2Q was -73%, the 8th negative growth quarter in 10 since the beginning of 2018. Real estate sales declined an even larger -85%. Sales were 80% below our forecast... With sales just Rp47bn in the 2Q compared to Rp113bn in the 1Q & Rp411bn in the 4Q we expect a recovery to Rp101bn by 2Q 2021.
Cashflow
Amazingly, despite the huge drop in sales, the cashflow was slightly less negative than a year ago at -Rp87bn in the 2Q when we exclude the positive working capital. We assume there’s no investment spending in the next 12 months, a slight recovery in sales & a positive margin again, which gives a positive average quarterly free cashflow of Rp10bm.
Slightly higher sales, margin recovery, a little bit lower net debt, Rp1 higher share price...
Balance sheet
The balance sheet is inevitably net debt which has been increasing as sales slumped since 2018. Net debt has reached a new peak Rp2.65tn in the 2Q which is coming from lower cash rather than higher debt. We assume there’s no room to increase debt & our cashflow & no dividend will cut net debt to Rp2.61tn in 12 months.
Profit
With lower sales, the net loss was larger than a year ago, -Rp48bm in the 2Q. The cash cost ratio of net profit add back depreciation minus sales as a % of sales was at 196%, but better than 265% in the 1Q. We use 2Q cashflow costs of Rp86bn a quarter to predict a next 12 month loss, -Rp42bn.
Value
BKSL has raised Tp4.48tn of capital these last 5 years, hopefully they can start to pay back soon. At Rp3.2tn current value, it’s 10x sales, 0.17x the assets, 0.31x equity with no profitability or yield. We predict the first half of 2021 cashflow will be +Rp75bn annualize. At 1.6% & 0.5x adjustment, that gives a higher target price of Rp36.
The balance sheet is inevitably net debt which has been increasing as sales slumped since 2018. Net debt has reached a new peak Rp2.65tn in the 2Q which is coming from lower cash rather than higher debt. We assume there’s no room to increase debt & our cashflow & no dividend will cut net debt to Rp2.61tn in 12 months.
Profit
With lower sales, the net loss was larger than a year ago, -Rp48bm in the 2Q. The cash cost ratio of net profit add back depreciation minus sales as a % of sales was at 196%, but better than 265% in the 1Q. We use 2Q cashflow costs of Rp86bn a quarter to predict a next 12 month loss, -Rp42bn.
Value
BKSL has raised Tp4.48tn of capital these last 5 years, hopefully they can start to pay back soon. At Rp3.2tn current value, it’s 10x sales, 0.17x the assets, 0.31x equity with no profitability or yield. We predict the first half of 2021 cashflow will be +Rp75bn annualize. At 1.6% & 0.5x adjustment, that gives a higher target price of Rp36.
