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CSRA, a 63% higher target price
Current 520 Target 850 +63%

November 21st 2021
1 minute read

Sales jumped 24%

• Sales jumped 24% in the third quarter to 264 billion rupiah vs our 234 billion rupiah forecast.
• This brings the quarterly average to 10% growth.
• We predict average growth of 5% to bring sales to 317 billion rupiah in the third quarter of 2022.

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Costs 14 points lower

• The cash cost ratio was 14 points lower at -58% in the third quarter giving a much higher 95 billion rupiah net profit.
• The average Cashflow cost ratio is at -66% now.
• We use the cashflow average -66% cost ratio to predict a 88 billion rupiah profit in the third quarter of 2022.

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Cashflow higher

• Free cashflow was higher at 45 billion rupiah in the third quarter with higher -76 billion rupiah investment Cashflow.
• Average quarterly Cashflow is at 34 billion rupiah now.
• We assume lower -45 billion rupiah investment spending which with higher sales gives a 61 billion rupiah Cashflow in the third quarter of 2022.

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Balance sheet, lower leverage

• Cash increased from 146 to 175 billion rupiah in the third quarter.
• Liabilities declined slightly from 879 to 876 billion rupiah so net cash improved from -733 to -701 billion rupiah.
• With our forecast cashflow & a -33 billion rupiah equity payout net cash will be -516 billion rupiah in 12 months time.

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Valuation, capital turning positive, a 63% higher target price

• CSRA capital from the last 23 quarters improved to -145 billion rupiah in the third quarter with a -17 billion rupiah liabilities payment & will be positive 50 billion rupiah in12 months time.
  
• At the current market value of 1,066 billion rupiah based on our forecasts it’s at 0.61 X assets with a 7 years payback & a 3% yield.
  
• Our cashflow forecast is 218 billion rupiah which means an 5 X valuation. An 8 X valuation gives a 63% higher target price of 850 rupiah.
  

Data file & model