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GGRM, a 147% higher target price
Current 34,075 Target 84,321 (+147%)

November 1st, 2021
1 minute read

Sales grew by 2%
  • Sales grew by 2% in the third quarter to 31,484 billion rupiah which is slightly lower than our forecast 32,073 billion rupiah.
  • This brings the quarterly average growth to 2%
  • We predict average growth of 2% again in this next 12 months to bring sales to 34,403 billion rupiah in the third quarter of 2022.

Costs seasonally lower
  • The cash cost ratio improved seasonally to -92% in the third quarter & net profit tripled to 1,824 billion rupiah.
  • The average Cashflow cost ratio is now at -93%.
  • We use the latest -92% cost ratio to predict a 2,061 billion rupiah profit in the third quarter of 2021.

Cashflow positive again
  • Free cashflow was positive again at 1,971 billion rupiah in the third quarter with lower investment spending increased of -1,091 billion rupiah.
  • Average quarterly Cashflow is now at 999 billion rupiah.
  • We assume the same -1,091 billion rupiah investment spending which with higher sales gives a 1,703 billion rupiah Cashflow in the third quarter of 2021.

Balance sheet , higher leverage
  • Cash declined from 6,562 to 4,086 billion rupiah in the third quarter.
  • Liabilities increased from 18,604 to 25,531 billion rupiah so net cash worsened from -12,042 to -21,445 billion rupiah.
  • With our forecast cashflow & a -2,376 billion rupiah equity payout net cash will be -17,331 billion rupiah in 12 months time.

Valuation, a 147% higher target price
  • GGRM capital from the last six years increased to 43,809 billion rupiah in the third quarter & will be 50,298 billion rupiah in the next 12 months.
  • At the current market value of 65,560 billion rupiah based on our forecasts it’s at 0.77X assets with an 11 years payback & a 4% yield.
  • Our cashflow forecast is 6,489 billion rupiah which means an 10X valuation.
  • At a 25X valuation gives a 147% higher target price of 84,321 rupiah.