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INDF, an 86% higher target price
Current 6,475 Target 12,019 +86%
December 3rd 2021
1 minute read
Sales grew 12%
Costs flat, profit up
Cashflow lower on working capital
Balance sheet, higher leverage
Valuation, an 86% higher target price
1 minute read
Sales grew 12%
- Sales grew 12% in the third quarter to 25,516 billion rupiah vs our 22,515 billion rupiah forecast.
- This brings the quarterly average to 8% growth.
- We predict average growth of 2% in this next 12 months to bring sales to 27,866 billion rupiah in the third quarter of 2022.
Costs flat, profit up
- The cash cost ratio was flat at -85% in the third quarter giving a 2,412 to 2,960 billion rupiah net profit.
- The average Cashflow cost ratio is at -86% now.
- We use the latest -85% cost ratio to predict a 3,323 billion rupiah profit in the third quarter of 2022.
Cashflow lower on working capital
- Free cashflow was lower at 1,360 billion rupiah in the third quarter with negative working capital & -1,155 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at 1,844 billion rupiah now.
- We assume the same -1,155 billion rupiah investment spending which with higher sales gives a 3,079 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, higher leverage
- Cash declined from 18,280 to 17,802 billion rupiah in the third quarter.
- Liabilities increased from 85,719 to 89,166 billion rupiah so net cash worsened from -67,439 to -71,364 billion rupiah.
- With our forecast cashflow & a -2,559 billion rupiah equity payout net cash will be -61,827 billion rupiah in 12 months time.
Valuation, an 86% higher target price
- INDF capital from the last 27 quarters improved to -12,482 billion rupiah in the third quarter with 2,760 billion rupiah new liabilities & a -3,723 billion rupiah equity payout & will be -945 billion rupiah in12 months time.
- At the current market value of 57,290 billion rupiah based on our forecasts it’s at 0.33 X assets with a 13 years payback & a 4% yield.
- Our 12 month cashflow forecast is 11,816 billion rupiah which means an current 5 X valuation. A forecast 9 X valuation gives a 86% higher target price of 12,019 rupiah.
