## INDF, Cashflow to head back above 2 trillion rupiah

Current, target price 6,575, 20,157 (+206.6%)

July 2nd, 2021

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**Sales, up**- Sales increased by 7% in the first quarter to 24.6 trillion rupiah which is above our forecast 23.3 trillion rupiah.
- This brings the average quarterly growth to 6%.
- We predict average growth of 3% in this next 12 months to bring sales to 27.6 trillion rupiah in the first quarter 2022.

**Costs, stable**- The cash cost ratio of net profit add depreciation minus sales as a percent of sales was -86% in the first quarter & profit was 2.63 billion rupiah.
- Average quarterly costs are now at -86%.
- We use the same -86% costs to predict a 3.1 trillion rupiah net profit in the first quarter of 2022.

**Cashflow, to head above 2 trillion rupiah**

- Cashflow was lower at 0.9 trillion rupiah with investment spending of -1.5 trillion rupiah in the first quarter.
- Average quarterly Cashflow has improved to 1.7 trillion rupiah.
- We use the same -1.5 trillion rupiah investment spending which with higher sales gives a 2.4 trillion rupiah cashflow in the first quarter 2022.

**Balance sheet, high leverage**

- With positive cashflow, cash increased slightly from 17.3 to 17.4 trillion rupiah in the first quarter.
- Liabilities increased from 84 to 88 trillion rupiah so net cash worsened from -67 to -71 trillion rupiah.
- With our forecast higher cashflow & assuming there’s a -2.3 trillion rupiah equity payout, net cash will improve to -63.8 billion rupiah in 12 months time.

**Value, 0.33X assets**

- INDF capital from the last six years worsened slightly to -13.8 trillion rupiah in the first quarter.
- At the current market value of 57,510 billion rupiah, based on our forecasts, it’s 0.55X sales & 0.33X assets with a 4.0% yield.
- Our free cashflow forecast is 8.8 billion rupiah. At 20.0X (5% yield), this gives a 206.6% higher target price of 20,156 rupiah.