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IPTV, digital up +60%!
🎯 📺 📈 Rp617
Last 12-months cashflow -Rp 151 billion ⬆️

December 12th, 2020
1 minute read

Sales
Following +6% growth in the second quarter, sales were +7% in the third. At Rp 953 billion, sales were 13% below our forecast Rp 1.1 trillion, but cashflow receipts were, Rp 1 trillion. Third quarter digital sales were a record Rp 336 billion, +60% from the second. We predict sales will rise to Rp 1.1 trillion by third quarter 2021.

Cashflow
Despite higher receipts, cashflow was lower in the third quarter, Rp 92 billion from Rp 376 billion in the second & below forecast Rp 183 billion. Investment spending was lower & close to forecast Rp 234 billion. We use that same investment spending which combined with higher sales gives an average quarterly cashflow Rp 154 billion this next 12 months.

Digital sales up +60%, cashflow positive, paying down debt, returning capital, higher target price...

Data file & model
Balance sheet
With positive cashflow again, the balance sheet net debt improved further to Rp 2.4 trillion in the third quarter compared to Rp 3 trillion in the first quarter. With our forecast for higher positive free cashflow ahead & with a dividend payout of Rp 171 billion, the net debt with improve further to Rp 1.97 trillion in 12 months time.

Profit
Net profit was higher at Rp 110 billion in the third quarter from Rp 85 billion in the second as depreciation was lower. The cash cost ratio, net profit add depreciation minus sales as a percent of sales was higher at 63%. We use the same 63% costs to predict next 12 months profit will be Rp 570 billion, +40%.

Value
IPTV has raised a net capita of Rp 1.4 trillion which will reduce to Rp 800 billion. At current market value Rp 11.1 trillion, it’s 2.66X sales, 1.1X assets, 1.55X equity with a profitability of 8% & a 1.5% yield. Our cashflow forecast is Rp 615 billion. At 1.6% with a 0.6X adjustment gives a higher target price of Rp617.
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