INDR, shares to (almost) triple
Target price Rp8,657
Last 12-month cashflow -USD 18 million
February 21st,, 2021
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- Sales dipped seasonally by -6% in the fourth quarter to USD 147 million after a record +54% recovery in the third quarter.
- The last 12 months avenge quarterly growth is at +2%. We expect average growth to rise to +5% a quarter in this next 12 months...
- ... & sales to reach USD 172 million by the fourth quarter of 2021.
- While operating Cashflow returned to positive, higher investment spending meant Cashflow was negative -USD 26 million in the fourth quarter, after +USD 13 million in the third quarter. Average quarterly Cashflow is -USD 4 million.
- We assume investment spending falls back to USD 6 million...
- ...which with higher sales gives an average cashflow +USD 5 million this next 12 months.
Sales recovering, cashflow to turn positive, 2.3% yield, shares to almost triple ...
- With negative cashflow, the balance sheet leverage of cash minus total liabilities was -USD 350 million in the fourth quarter, from -USD 317 million in the third quarter, but better than -USD 367 million a year ago.
- With our forecast positive cashflow & a dividend of USD 3 million...
- ...net cash will be -USD 299 million in 12 months time.
- Net profit was higher, USD 4 million in the fourth quarter after USD 1 million in the third quarter, -USD 3 million in the second.
- The cash cost ratio of net profit add depreciation minus sales as a percent of sales was lower, 91%.
- We use average costs 93% to predict a higher next 12 months profit, USD 11 million.
- INDR has paid out capital of USD 195 million in the last five years.
- At the current market value of USD 143 million, it’s only 0.22X sales , 0.2X assets, 0.36X equity with a 2.9% profitability & a 2.3% yield.
- Our cashflow forecast is USD 22 million. At 1.6% with a 0.2X adjustment, gives a higher target price of Rp8,657.