## CSRA, turning to a capital payer

Current, target price Rp300, 1,902 (+534%)

May 27th, 2021

1 minute read

1 minute read

**Sales, jump**- Sales increased by 13% in the first quarter to 176 billion rupiah, which is -15% compared to our forecast.
- This is after a -18% decline in the fourth quarter & brings the quarterly average growth to 10%.
- We predict average growth of 6% a quarter in this next 12 months which will bring sales to 222 billion rupiah by the first quarter of 2022.

**Cashflow, positive & higher**- Cashflow was positive 40 billion rupiah in the first quarter after positive 34 billion rupiah in the fourth quarter.
- Average quarterly cashflow is now positive 34 billion rupiah.
- We use flat investment spending of -21 billion rupiah, which with higher sales, gives a similar average quarterly cashflow of 31 billion rupiah in this next 12 months.

## Sales up, margins higher, cashflow positive & higher, lower leverage, only 0.14X assets & turning capital payer, much higher target price...

**Balance sheet, lower leverage**

- With positive cashflow, the net leverage of cash minus total liabilities was -759 billion rupiah in the first quarter from -785 billion rupiah in the fourth quarter & -823 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -13 billion rupiah...
- ...the net leverage will improve to -648 billion rupiah in 12 months time.

**Profit, higher margins**

- Net profit was higher at 41 billion rupiah in the first quarter from 8 billion rupiah in the fourth quarter.
- The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was down to -69%.
- We use average -76% costs, to predict a higher next 12 months profit of 134 billion rupiah.

**Value, turning to a capital payer**

- CSRA cumulative net capital raised is down to -69 billion rupiah from the last five years.
- At the current market value of 615 billion rupiah, based on forecasts it’s 11.0X capital paid, 2.2X sales, 0.14X assets, 0.8X equity, with a 18.2% profitability & a 2.2% yield.
- Our free cashflow forecast is 125 billion rupiah. At 1.6% with a 0.5X adjustment, gives a 534% higher target price of 1,902 rupiah.