## GJTL, an extremely cheap stock

Target price Rp4,027

Last 12-months cashflow +Rp 2.15 trillion

March 9th,, 2021

1 minute read

Sales

Cashflow

1 minute read

Sales

- Sales increased by 4% in the fourth quarter to Rp 3.82 trillion which was 0% different from our forecast! This is after a 73% surge in the third quarter.
- Average quarterly growth is now at 7%.
- We expect growth to be 5% a quarter this next 12 months & sales to reach Rp 4.54 trillion by fourth quarter of 2021.

Cashflow

- Cashflow jumped to Rp 1 trillion in the fourth quarter up from Rp 777 billion in the third quarter despite higher investment spending.
- Average quarterly Cashflow is now at Rp 537 billion.
- Using the same quarterly investment spending of Rp 157 billion, with higher sales, we predict average quarterly free Cashflow of Rp 281 billion in this next 12 months.

## Sales recovering, huge Cashflow, de leveraging, an 11% yield, shares to quadruple...

Balance sheet

Profit

Value

- The balance sheet leverage of cash minus total liabilities was -Rp 9.9 trillion in the fourth quarter from -Rp 11.1 trillion in the third quarter & -Rp 12 trillion a year ago.
- With our forecast higher average cashflow & a dividend payout of Rp 330 billion...
- ...net cash will improve further to be -Rp 9 trillion in 12 months time.

Profit

- Net profit was Rp 424 billion in the fourth quarter up from Rp 36 billion in the third quarter on FX gains.
- The cash cost ratio of net profit add back depreciation minus sales as a percent of sales improved to 89%.
- We use the same 89% costs to predict a much higher next 12 months profit, Rp 1.1 trillion.

Value

- GJTL has paid capital of Rp 2.8 trillion in the last six years.
- At the current market value of Rp 3 trillion, it’s 1X capital paid 0.18X sales, 0.17X assets, 0.4X equity with a 14% profitability & a 10.9% yield.
- Our cashflow forecast is Rp 1.1 trillion. At 1.6% with a 0.2X adjustment, gives a higher target price of Rp4,027.