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BWPT, cashflow positive again
Current, target price Rp117, 303 (+159%)

April 9th, 2021
1 minute read

Sales
  • Sales jumped 49% in the fourth quarter to Rp 1806 billion, which is 17% above our forecast.
  • This is after a -18% decline in the third quarter and brings the quarterly average growth to -2%.
  • We predict a positive 9% quarterly growth in the next 12 months which will bring sales to Rp 825 billion by the fourth quarter 2021.

Cashflow
  • Cashflow was Rp 169 billion in the fourth-quarter up from Rp 36 billion in the third quarter, with an Investment gain Rp 1 billion.
  • The average quarterly cashflow is Rp 42 billion.
  • We assume investment cashflow stays at +Rp 1 billion which with higher sales gives a higher average quarterly free Cashflow Rp 76 billion in this next 12 months.

Sales up 49%, Cashflow positive, slight de leverage, only 0.21X assets, higher target price...

Data & financial model
Balance sheet
  • With positive Cashflow, the net leverage of cash minus total liabilities was Rp 11.5 trillion in the fourth quarter from Rp 11.6 trillion in the third quarter and Rp 11.2 trillion a year ago.
  • With our forecast higher free Cashflow and assuming a small Rp 1 dividend...
  • ...the net cash will be Rp 11 .2 trillion in 12 months time.

Profit
  • The net loss was -Rp 344 billion in the fourth quarter from -Rp 336 billion in the third-quarter.
  • The cash cost ratio of net profit add back non-cash costs minus sales as a percent of sales was 122%.
  • As sales recover we use lower 91% cost to predict a lower net loss -Rp 349 billion in this next 12 months.

Value
  • BWPT has raised Rp 1.38 trillion of capital in the last six years.
  • At the current market value Rp 3 trillion, it’s at 1X sales, 0.2 1X assets, 0.96X equity with no profitability and no yield yet.
  • Our free cashflow forecast is Rp 305 billion. At 1.6% with a 0.5X adjustment, this gives a 159% higher target price of Rp303.
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