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DCII, our fastest grower
Target price Rp13,343
Last 12-month cashflow -Rp 515 billion

February 17th,, 2021
1 minute read

Sales
  • Sales are growing at +80% year on year as of the latest results & are Rp 185 billion a quarter.
  • This of course puts the last 12 months average quarterly growth at +20%.
  • We assume average growth is slightly lower at +18% in the next 12 months & that sales rise to Rp 358 billion by the third quarter 2021.

Cashflow
  • Cashflow based on the latest results is a negative -Rp 113 billion a quarter. This is an improvement on our estimate of the last 12 months quarterly average, -Rp 129 billion.
  • Investment spending is at Rp 143 billion.
  • We use this same spending, which with higher sales gives an improved average quarterly Cashflow, -Rp 47 billion this next 12 months.

Sales growing +80%, negative cashflow improving, high valuation, but higher target price...

Data file & model
Balance sheet
  • Because of negative cashflow, the balance sheet leverage of cash minus total liabilities was -Rp 1.48 trillion in the latest results from -Rp 1.07 trillion at the end of 2019.
  • With our forecast for lesser negative cashflow ahead & assuming a dividend payout of Rp 87 billion...
  • ...the net cash will be at -Rp 1.76 trillion in 12 months time.

Profit
  • Net profit from the latest financial results was positive at +Rp 39 billion a quarter.
  • The cash cost ratio of net profit add non cash costs minus sales as a percent of sales was at 66%.
  • We use the same 66% cost ratio & higher non cash costs, to predict the next 12 months profit is higher, Rp 258 billion.

Value
  • DCII has raised Rp 972 billion capital in the last four years.
  • At the current market value of Rp 29.1 trillion, it’s 26X sales, 11X assets, 35X equity, with a 31% profitability & a 0.3% yield.
  • Our operating cashflow forecast is Rp 382 billion. At a 1.2% yield with no discount, that gives a higher target price of Rp 13,343.
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