JPFA, turned capital payer
Target price Rp21,982
Last 12-month cashflow +Rp 4.6 trillion
March 1st,, 2021
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- Sales soared 50% in the fourth quarter to Rp 12 trillion after a 2% increase in the third quarter, -14% drop in the second.
- Sales were 40% above our forecast.
- The average quarterly sales growth is now at 8%. We expect average growth to slow slightly to 3% & sales to reach Rp 13.3 trillion by the fourth quarter 2021.
- Cashflow was a record at Rp 3 trillion in the fourth quarter, up from Rp 502 billion in the third quarter.
- Average quarterly free Cashflow is now at Rp 524 billion.
- We use the same as the latest investment spending, Rp 678 billion, which with higher sales gives an average quarterly free Cashflow Rp 328 trillion in this next 12 months.
With huge sales & cashflow, now a capital payer, only 0.54X assets, higher target price ...
- The balance sheet leverage of net cash minus total liabilities was at -Rp 13.2 trillion in the fourth quarter from -Rp 13.24 trillion in the third quarter, -Rp 12.8 trillion a year ago.
- With our forecast for higher free cashflow & a dividend payout of Rp 742 billion...
- ...the net cash will be -Rp 13.5 trillion in 12 months time.
- Net profit was higher at Rp 918 billion in the fourth quarter up from Rp 123 billion in the third quarter.
- The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was lower at 89%.
- We use the average 92% costs to predict a stronger next 12 months profit of Rp 2.47 trillion.
- JPFA has turned capital payer Rp 1.73 trillion in the last five years.
- At the current market value, Rp 14.7 trillion, it’s 8.4X capital paid, only 0.29X sales, 0.54X assets, 1.12X equity with a 18.9% profitability & a 5.1% yield.
- Our free cashflow forecast is Rp 1.35 trillion. At 1.6% with a 0.5X adjustment gives a higher target price Rp4,534.