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Golden Agri, a 6% yield
Current, target price 0.23, 0.60 (+162%)
September 16th, 2021
1 minute read
Sales up
Costs flat
1 minute read
Sales up
- Sales grew by another 21% in the first half to 4,454 million dollars which is well above our forecast 3,649 million dollars.
- The average growth is now at 15%.
- We precut average growth of 7% a semester which will bring sales up to 5,099 million dollars in the first half of 2022.
Costs flat
- The cash costs ratio increased from -90% to -92% while profit declined to 174 million dollars in the first half.
- Average costs are also at -92%.
- We use the same -92% costs to predict a 219 million dollars profit in the first half of 2022.
Cashflow lower on large working capital
Balance sheet, lower leverage
Valuation, a 6% yield
- Cashflow declined to 82 million dollars with investment spending of -66 million dollars in the first half, because of large negative working capital.
- Average cashflow is at 166 million dollars.
- We use the same -66 million dollars investment, which with higher sales & 0 working capital gives a much higher 330 million dollars Cashflow in the first half of 2022.
Balance sheet, lower leverage
- Cash increased from 403 to 467 million dollars in the first half.
- Liabilities declined from 4,695 to 4,615 million dollars, so net cash improved from -4,292 to -4,148 million dollars.
- With our forecast higher cashflow & a -123 million dollars equity payout, net cash will improve to -3,638 million dollars in 12 months time.
Valuation, a 6% yield
- Golden Agri capital from the last six years increased to 597 million dollars in the first half & will rise to 1,171 million dollars in 12 months.
- At the current value 2,178 million dollars, based on forecasts, it’s at 0.24X assets with a 6% yield.
- Our cashflow forecast is 634 million dollars which is a 3X valuation. At 9X gives a 162% higher target price of 0.60 Singapore dollars.
