Log in here
HMSP
HM Sampoerna, ready to roll back up
🎯 💨 📈 ➡️ Rp3,882
12m Free cashflow +Rp12,444bn
July 25th, 2020
⏰ 1 minute read
⏰ 1 minute read
Watch the 3 minute explainer using the data file & model ⬇️
Sales
HMSP sales growth slumped in 2Q to -21.8%, way below our forecast. Machine rolled sales fell 27%! But the all important hand rolled managed to hold steady and grew by 2% from a year ago. Whites fell 24%. We see sales recovering starting in the 3Q but predict that the next 12 months will see sales decline -1% to Rp98.8tn.
Cashflow
With the decline in sales, 2Q cashflow excluding working capital slumped by half compared to a year ago. The last 12-months free cashflow excluding working capital also shows the strain at Rp12.4tn from Rp14.5tn as of the 1Q. With our forecast for slightly lower sales again the next 12-months free cashflow will be also slightly less at Rp12tn.
HMSP sales growth slumped in 2Q to -21.8%, way below our forecast. Machine rolled sales fell 27%! But the all important hand rolled managed to hold steady and grew by 2% from a year ago. Whites fell 24%. We see sales recovering starting in the 3Q but predict that the next 12 months will see sales decline -1% to Rp98.8tn.
Cashflow
With the decline in sales, 2Q cashflow excluding working capital slumped by half compared to a year ago. The last 12-months free cashflow excluding working capital also shows the strain at Rp12.4tn from Rp14.5tn as of the 1Q. With our forecast for slightly lower sales again the next 12-months free cashflow will be also slightly less at Rp12tn.
Sales to recover, cash flow & net cash too, lower dividend but still 5% yield, shares to rebound...
Balance sheet
The net cash position has also taken a hit from lower cashflow as well as the dividend payment Rp133.9tn which is larger than expected. Net cash was Rp4.8tn as of 2Q from Rp12.6tn in 1Q. With our cashflow forecast and a lower dividend payment of Rp10.6tn in the next 12 months, we predict the net cash will improve to Rp6.2tn.
Profit
With the sales decline, net profit fell by -55%. Absolute costs were lower, but the cash cost ratio of net profit add depreciation minus sales as a % of sales increased sharply to 91% from 85%. The 12-months average is at 87% and we use that to predict the next 12-months profit will decline by -3% to Rp11.5tn.
Value
HMSP current market value has fallen to Rp204.7tn. That’s 2.07x our sales forecast, 4.81x the value of the assets and 7.4x the value of the equity with a profitability of 42%. Yield forecast is 5%. We use our 1.6% cashflow valuation with a 40% discount because of the slower sales growth which still gives a higher target price of Rp3,882.
The net cash position has also taken a hit from lower cashflow as well as the dividend payment Rp133.9tn which is larger than expected. Net cash was Rp4.8tn as of 2Q from Rp12.6tn in 1Q. With our cashflow forecast and a lower dividend payment of Rp10.6tn in the next 12 months, we predict the net cash will improve to Rp6.2tn.
Profit
With the sales decline, net profit fell by -55%. Absolute costs were lower, but the cash cost ratio of net profit add depreciation minus sales as a % of sales increased sharply to 91% from 85%. The 12-months average is at 87% and we use that to predict the next 12-months profit will decline by -3% to Rp11.5tn.
Value
HMSP current market value has fallen to Rp204.7tn. That’s 2.07x our sales forecast, 4.81x the value of the assets and 7.4x the value of the equity with a profitability of 42%. Yield forecast is 5%. We use our 1.6% cashflow valuation with a 40% discount because of the slower sales growth which still gives a higher target price of Rp3,882.
