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CPIN, a 26% higher target price
Current 5,950 Target 7,484 +26%

November 19th 2021
1 minute read

Sales declined-7%

• Sales declined -7% in the third quarter to 12,124 billion rupiah vs our 12,802 million dollars forecast.
• This brings the quarterly average to -3% growth.
• We predict average growth of 6% to bring sales to 15,073 billion rupiah in the third quarter of 2022.

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Costs up 11 points

• The cash cost ratio was 11 points higher at -99% in the third quarter giving a sharply lower -158 billion rupiah net profit.
• The average Cashflow cost ratio is at -87% now.
• We use the average -87% cost ratio to predict a bounce back to 1,782 billion rupiah profit in the third quarter of 2022.

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Cashflow negative

• Free cashflow was negative -1,278 billion rupiah in the third quarter with -892 billion rupiah investment Cashflow.
• Average quarterly Cashflow is down to 558 billion rupiah now.
• We assume the same -892 billion rupiah investment spending which with higher sales gives a 1,123 billion rupiah Cashflow in the third quarter of 2022.

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Balance sheet, higher leverage

• Cash declined from 3,490 to 1,837 billion rupiah in the third quarter.
• Liabilities increased from 8,504 to 10,560 billion rupiah so net cash worsened sharply from -5,014 to -8,723 billion rupiah .
• With our forecast cashflow & a -3,363 billion rupiah equity payout net cash will be -7,939 billion rupiah in 12 months time.

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Valuation, a 26% higher target price

• CPIN capital from the last 27 quarters increased to 9,445 billion rupiah in the third quarter with a 1,400 billion rupiah increase in liabilities & a -1,836 billion rupiah equity payment & will be 14,768 billion rupiah in12 months time.
• At the current market value of 97,570 billion rupiah based on our forecasts it’s at 2.70 X assets with a 8 years payback & a 3% yield.
• Our cashflow forecast is 4,091 billion rupiah which means an 24 X valuation. A 30 X valuation gives a 26% higher target price of 7,484 rupiah.

Data file & model