## IPCM, strong cash position

Current, target price Rp309, 885 (+187%)

April 9th, 2021

1 minute read

Sales, beat forecast

Cashflow, Rp 150 billion

1 minute read

Sales, beat forecast

- Sales increase again +9% in the fourth quarter to Rp 187 billion which is 2% ahead of our forecast.
- This is after growth of 11% in the third quarter bringing the average quarterly growth back to 0%.
- We predict average quarterly growth of 4% in the next 12 months, bringing sales to Rp 215 billion by the fourth quarter 2021.

Cashflow, Rp 150 billion

- Cashflow was at Rp 63 billion in the fourth quarter down slightly from Rp 70 billion in the third quarter.
- The average quarterly free Cashflow is now at Rp 46 billion.
- We assume investment spending stays at Rp 0 billion, which with higher sales gives an average quarterly free cash flow of Rp 37 billion in this next 12 months.

## Sales beat, cashflow forecast Rp 150 billion, strong cash position, 3.3% yield, higher target price...

Balance sheet, strong cash position

Profit, higher depreciation

Value, a 3.3% yield

- Despite positive cashflow the net leverage of cash minus total liabilities was +Rp 260 billion in the fourth quarter from +Rp 280 billion in the third quarter and +Rp 266 billion a year ago.
- With our forecast positive Cashflow and assuming a dividend payout of Rp 53 billion...
- ...net cash will increase to Rp 394 billion in 12 months time.

Profit, higher depreciation

- Net profit was Rp 11 billion in the fourth quarter down from Rp 16 billion in the third quarter on higher depreciation.
- The cash cost ratio of net profit add depreciation minus sales as a percent of sales was 76%.
- We use the same 76% cost ratio to predict a lower next 12 months net profit of Rp 53 billion.

Value, a 3.3% yield

- IPCM has paid out Rp 391 billion of capital the last five years.
- At the current market value of Rp 1.6 trillion, it’s 4.16X capital paid, 2.05X sales, 1.2X assets, 1.48X equity with a 4.8% profitability & a 3.3% yield.
- Our cashflow forecast is Rp 150 billion. At 1.6% with a 0.5X adjustment gives a 187% higher target price, Rp”885.