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GGRM, only 1.5X capital paid
Current, target price Rp35,800, 121,956 (+241%)
May 4th, 2021
1 minute read
Sales, seasonally lower
Cashflow, strong
1 minute read
Sales, seasonally lower
- Sales declined seasonally by -4% in the first quarter to 29,747 billion rupiah, which is -3% compared to our forecast.
- This is after a 5% increase in the fourth quarter & brings the quarterly average growth to 2%.
- We predict average growth of 4% a quarter in this next 12 months which will bring sales to 34,456 billion rupiah by the first quarter of 2022.
Cashflow, strong
- Cashflow was positive 8,922 billion rupiah in the first quarter after negative -5,775 billion rupiah in the fourth quarter.
- Average quarterly cashflow is now at 2,325 billion rupiah.
- We use flat investment spending of -1,035 billion rupiah, which with higher sales, gives a similar average quarterly cashflow of 2,347 billion rupiah in this next 12 months.
Sales strong, cashflow strong, de leveraging, only 1.5X capital paid, if we’re right & margins recover, shares to above 100k...
Balance sheet, de leveraging
Profit, expecting better margins
Value, only 1.5X capital paid
- With positive cashflow, the net leverage of cash minus total liabilities was -11,861 billion rupiah in the first quarter from -14,895 billion rupiah in the fourth quarter & -20,370 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -3,221 billion rupiah...
- ...net cash will improve to -5,696 billion rupiah in 12 months time.
Profit, expecting better margins
- Net profit was lower at 1,747 billion rupiah in the first quarter from 2,001 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 up to -92%.
- We use lower -90% costs, to predict a much higher next 12 months profit of 10,737 billion rupiah.
Value, only 1.5X capital paid
- GGRM cumulative net capital is at +35,880 billion rupiah from the last six years.
- At the current market value of 68,883 billion rupiah, based on forecasts it’s only 1.52X capital paid, 0.53X sales, 0.85X assets, 1.02X equity, with a 16% profitability & a 4.7% yield.
- Our free cashflow forecast is 9,386 billion rupiah. At 1.6% with a 0.4X adjustment, gives a 241% higher target price of 121,956 rupiah.
