ISAT, higher investment spending
Target price Rp6,123
Last 12-month cashflow +Rp 1.54 trillion
February 19th,, 2021
1 minute read
1 minute read
- Sales grew +3% in the fourth quarter to Rp 7.33 trillion after +3% growth in the third quarter & were 2% below our forecast.
- Data revenue continues to out perform, rising +6%.
- Average quarterly growth is 0%. We expect stronger average growth of +5% in this next 12 months & sales to reach Rp 8.9 trillion by fourth quarter 2021.
- Despite higher revenue, cashflow was negative in the fourth quarter -Rp 1.07 trillion from +Rp 1.49 trillion in the third quarter. Average quarterly Cashflow is +Rp 385 billion.
- Investment spending was high, Rp 2.8 trillion. We use an average Rp 1.5 trillion spending..:
- which with higher sales gives an average quarterly Cashflow Rp 333 billion in this next 12 months.
Sales up, cashflow negative on higher investment spending, still a higher target price...
- The balance sheet leverage of cash minus total liabilities was -Rp 48 trillion in the fourth quarter, up from -Rp 44.2 trillion in the third quarter, -Rp 43.2 trillion a year ago as cash declined.
- With our forecast positive cashflow & assuming a dividend of Rp 108 billion...
- ...the net cash will improve to -Rp 43.8 in 12 months time.
- Net profit was a loss -Rp 212 billion in the fourth quarter after -Rp 100 billion in the third quarter as depreciation increased.
- The cash cost ratio of net profit add depreciation minus sales as a percent of sales was flat, 67%.
- We use the same 67% to predict a next 12 months return to profit of Rp 155 billion.
- ISAT has paid out capital of Rp 5.1 trillion the last six years.
- At the current market value of Rp 29.6 trillion, it’s 5.78X capital paid, 0.91X sales, 0.51X assets, 2.29X equity with a 1.2% profitability & a 0.4% yield.
- Our cashflow forecast is Rp 1.33 trillion which a 1.6% with a 0.4X adjustment, gives a higher target price 6,123.