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BOLA
Bali Bintang, a generous target
🎯 ⚽️ 📉➡️ Rp246
12m free cashflow -Rp219bn ⬇️⬇️
July 15th, 2020
⏰ 1 minute read
⏰ 1 minute read
Watch the 3 minute explainer using the data file & model ⬇️
Sales
BOLA sales growth in 1Q was fast at 51% after an also fast 4Q +166%. The growth is coming from the jump in sponsorship which is up 61% from a year ago. Ticket sales were lower -13%. The season starts in October so we expect a flat 2Q , but growth of 7% for the next 12 months to Rp246bn.
Cashflow
There’s been large investment spending in the last 2 quarters on stadium & other facilities. A total Rp246bn. This has meant the last 12 months free cashflow is at -Rp219bn. We assume the investment spending is lower now & this together with our sales growth forecast, means the next 12 months free cashflow will improve to a stil negative -Rp63bn.
BOLA sales growth in 1Q was fast at 51% after an also fast 4Q +166%. The growth is coming from the jump in sponsorship which is up 61% from a year ago. Ticket sales were lower -13%. The season starts in October so we expect a flat 2Q , but growth of 7% for the next 12 months to Rp246bn.
Cashflow
There’s been large investment spending in the last 2 quarters on stadium & other facilities. A total Rp246bn. This has meant the last 12 months free cashflow is at -Rp219bn. We assume the investment spending is lower now & this together with our sales growth forecast, means the next 12 months free cashflow will improve to a stil negative -Rp63bn.
Higher sales, better cashflow but still negative, expensive...
Balance sheet
After IPO the net cash has been declining because of the negative cashflow. From a peak of Rp304bn the net cash has fallen a third to Rp191bn as of 1Q. Strangely there’s new equity in the cashflow but not in the balance sheet... with our forecast negative cashflow & no dividend, net cash would fall to Rp128bn in 12 months.
Profit
Net profit more than doubled to Rp7bn from Rp3bn a year ago because the cash cost ratio (net profit add back depreciation minus sales as % of sales) improved from 91% to 73%. But this is not reflected in cashflow. We use the average 86% to get a next 12 months profit of Rp17bn +45% from the last 12 months.
Value
BOLA is trading at a current market value of Rp990bn. That’s 4.32x our sales forecast, 1.83x the value of the assets & 2x the equity. We use a price to sales valuation as there’s no cashflow yet with a very generous multiple of 6x. Based on the next 12 months sales forecast, this would give a target price of Rp246.
After IPO the net cash has been declining because of the negative cashflow. From a peak of Rp304bn the net cash has fallen a third to Rp191bn as of 1Q. Strangely there’s new equity in the cashflow but not in the balance sheet... with our forecast negative cashflow & no dividend, net cash would fall to Rp128bn in 12 months.
Profit
Net profit more than doubled to Rp7bn from Rp3bn a year ago because the cash cost ratio (net profit add back depreciation minus sales as % of sales) improved from 91% to 73%. But this is not reflected in cashflow. We use the average 86% to get a next 12 months profit of Rp17bn +45% from the last 12 months.
Value
BOLA is trading at a current market value of Rp990bn. That’s 4.32x our sales forecast, 1.83x the value of the assets & 2x the equity. We use a price to sales valuation as there’s no cashflow yet with a very generous multiple of 6x. Based on the next 12 months sales forecast, this would give a target price of Rp246.
