Other stocks here
FREN, a slightly higher target price
Current, target price Rp89, 115 (29%)
May 29th, 2021
1 minute read
Sales, down seasonally
Cashflow, less negative
1 minute read
Sales, down seasonally
- Sales declined seasonally by -6% in the first quarter to 2,406 billion rupiah, which is -6% compared to our forecast.
- This is after a 1% increase in the fourth quarter & brings the quarterly average growth to 5%.
- We predict average growth of 8% a quarter in this next 12 months which will bring sales to 3,249 billion rupiah by the first quarter of 2022.
Cashflow, less negative
- Cashflow was negative -313 billion rupiah in the first quarter up from -1,797 billion rupiah in the fourth quarter.
- Average quarterly cashflow is now at -1,052 billion rupiah.
- We use lower investment spending of -454 billion rupiah, which with higher sales, gives a positive average quarterly cashflow of 156 billion rupiah in this next 12 months.
Sales down seasonally, margins higher, cashflow less negative & forecast to turn positive, plenty of capital to payback, cheap to assets & a slightly higher target price...
Balance sheet, higher leverage
Profit, higher margins
Value, cheap to assets but plenty of capital to pay back
- With negative cashflow, the net leverage of cash minus total liabilities was -26,257 billion rupiah in the first quarter from -25,664 billion rupiah in the fourth quarter & -21,951 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a small dividend payout of -30 billion rupiah...
- ...net leverage will be -24,509 billion rupiah in 12 months time.
Profit, higher margins
- Net profit was negative at -397 billion rupiah in the first quarter from 228 billion rupiah in the fourth quarter on FX losses.
- The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was down to -72%.
- We use the same -72% costs, to predict a positive next 12 months profit of 43 billion rupiah.
Value, cheap to assets but plenty of capital to pay back
- FREN cumulative net capital is at -24,083 billion rupiah from the last six years.
- At the current market value of 23,430 billion rupiah, based on forecasts it’s 1.84X sales, 0.63X assets, 1.96X equity, with a 0.4% profitability & a 0.1% yield.
- Our free cashflow forecast is 690 billion rupiah. At 1.6% with a 0.7X adjustment, gives a 29% higher target price of 115 rupiah.
