## ITMG, cashflow rising on low investment spending

Current, target price 13,000, 68,031 (+423%)

May 17th, 2021

1 minute read

Sales, growth to turn positive

Cashflow, to rise on low investment

1 minute read

Sales, growth to turn positive

- Sales declined by -9% in the first quarter to 284 million dollars, which is -14% compared to our forecast.
- This is after a 43% increase in the fourth quarter & brings the quarterly average growth to -3%.
- We predict positive growth of 8% a quarter in this next 12 months which will bring sales to 466 million dollars by the first quarter of 2022.

Cashflow, to rise on low investment

- Cashflow was positive 46 million dollars in the first quarter after negative -2 million dollars in the fourth quarter with low investment spending.
- Average quarterly cashflow is now positive 18 million dollars.
- We use higher investment spending of -9 million dollars, which with higher sales, still gives a higher average quarterly cashflow of 76 million dollars in this next 12 months.

## Sales down a bit, but stronger margins, higher cashflow on lower investment, heading to net cash, cheap, much higher target price...

Balance sheet, heading to net cash

Profit, up on stronger margins

Value, a 12.3% yield

- With positive cashflow, the net leverage of cash minus total liabilities was -42 million dollars in the first quarter from -82 million dollars in the fourth quarter & -152 million dollars a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -125 million dollars...
- ...the net leverage will turn positive 135 million dollars in 12 months time.

Profit, up on stronger margins

- Net profit was higher at 42 million dollars in the first quarter from a -1 million dollars loss in the fourth quarter.
- The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was down to -71%.
- We use average -78% costs, to predict a higher next 12 months profit of 179 million dollars.

Value, a 12.3% yield

- ITMG cumulative net capital is at 743 million dollars from the last six years.
- At the current market value of 1,019 million dollars, based on forecasts it’s 1.1X capital paid, 0.7X sales, 0.9X assets, 1.1X equity, with a 19.1% profitability & a 12.3% yield.
- Our free cashflow forecast is 284 million dollars. At 1.6% with a 0.3X adjustment, gives a 423% higher target price of 68,031 rupiah.