IPCM, a 5.5% yield
Target price Rp916
Last 12-month cashflow +Rp 332 billion
February 16th,, 2021
1 minute read
1 minute read
- With Indonesian imports rising, sales growth was unseasonably positive in the third quarter at +11% to Rp 172 billion after a -16% decline in the second quarter.
- Average quarterly growth in the last 12 months is now positive +2%.
- We expect the average growth to rise to +3% & sales to reach Rp 191 billion by the third quarter 2021.
- Cashflow also increased to Rp 70 billion in the third quarter from Rp 50 billion in the second quarter.
- The last 12 month average quarterly Cashflow is Rp 83 billion thanks to tax refunds.
- Investment spending is zero & we assume this continues, which with higher sales gives an average quarterly Cashflow Rp 30 billion in this next 12 months.
Faster sales, steady Cashflow, lots of cash, a 5.5% yield, higher target price...
- The balance sheet leverage of cash minus total liabilities was positive +Rp 285 billion in the third quarter from Rp 264 billion in the second quarter & Rp 273 billion a year ago.
- With our forecast for positive cashflow & assuming a dividend payout of Rp 65 billion...
- ...net cash will rise to Rp 340 billion in 12 months time.
- Despite higher sales, net profit in the third quarter was lower at Rp 16 billion from Rp 22 billion in the second quarter.
- The cash cost ratio of profit add non-cash costs minus sales as a percent of sales was higher at 84%.
- We use the avenge 79% costs to predict a higher next 12 months profit Rp 107 billion.
- IPCM has paid out capital of Rp 381 billion in the last five years.
- At the current market value of Rp 1.8 trillion, it’s 4.6X capital paid, 2.35X sales, 1.32X assets, 1.59X equity with a 9.7% profitability & a 5.5% yield.
- Our cashflow forecast is Rp 155 billion. At 1.6% with a 0.5X adjustment gives a higher target price Rp916.