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CPIN, a 40% higher target price
Current, target price 6,475, 9,059 (+40%)

August 24th, 2021
1 minute read

Sales up again

• Sales increased by another 5% in the second quarter to 13,064 billion rupiah which is slightly below our forecast 13,150 billion rupiah.
• This brings the average quarterly growth to 9%.
• We predict average growth of 4% in this next 12 months to bring sales to 15,304 billion rupiah in the second quarter 2022.

Costs, higher margins

• The cash cost ratio of net profit add non cash costs minus sales as a percent of sales increased from -86% to -88% in the second quarter & profit declined from 1,455 to 1,378 billion rupiah.
• Average quarterly costs are now at -88%.
• We use the average costs of -88% to predict a 1,656 billion rupiah profit in the second quarter of 2022.

Data file & model

Cashflow doubles

• Cashflow was higher from 373 to 621 billion rupiah with flat investment spending of -542 billion rupiah in the second quarter.
• Average quarterly Cashflow is now at 1,122 billion rupiah.
• We use the same -542 billion rupiah investment spending which with higher sales gives a 1,356 billion rupiah cashflow in the second quarter 2022.

Balance sheet, lower leverage

• With positive cashflow, cash increased from 2,949 to 3,490 billion rupiah in the second quarter.
• Liabilities increased from 8,034 to 8,504 billion rupiah so net cash improved slightly from -5,085 to -5,014 billion rupiah.
• With our forecast cashflow & a -3,076 billion rupiah equity payout, net cash will be -3,137 billion rupiah in 12 months time.

Value, a 40% higher target price

• CPIN capital from the last six years was flat at 9,034 billion rupiah in the second quarter.
• At the current market value of 106,200 billion rupiah, based on our forecasts, it’s at 1.85X sales & 2.94X assets with a 3% yield.
• Our free cashflow forecast is 4,953 billion rupiah. At 30X (a 3.3% yield), this gives a 40% higher target price of 9,059 rupiah.