## JSMR, still negative cashflow

Current, target price Rp4,110, 4,577 (+11%)

Last, next 12-months cashflow -Rp 22.7, -4.8 trillion

March 30th, 2021

1 minute read

Sales rising fast

Cashflow still negative

1 minute read

Sales rising fast

- Sales increased another 10% in the fourth quarter to Rp 2.75 trillion which is 1% below our forecast.
- This is after a 55% increase in the third quarter, bringing the quarterly average growth to 4%.
- We predict the same 4% avenge quarterly growth in this next 12 months, bringing sales to Rp 3.21 trillion by the fourth quarter of 2021.

Cashflow still negative

- Cashflow was a bigger negative -Rp 5.7 trillion in the fourth quarter after -Rp 1.4 trillion in the third quarter from huger investment spending.
- Quarterly average cashflow is now at -Rp 5.7 trillion.
- We assume lower quarterly investment spending Rp 2.1 trillion which with higher sales gives a quarterly average cashflow of -Rp 1.2 trillion in this next 12 months.

## Sales rising fast, but cashflow still negative, only 0.27X assets, slightly higher target price...

Balance sheet, higher leverage

Profit, margins to improve

Value, cheap to assets

- With negative cashflow, the balance sheet net leverage of cash minus total liabilities was -Rp 74.7 trillion in the fourth quarter from -Rp 74.3 trillion in the third quarter & -Rp 72.2 trillion a year ago.
- With our forecast less negative cashflow & assuming no dividend payout...
- ...the net cash will be at -Rp 79.7 trillion in 12 months time.

Profit, margins to improve

- Net profit turned positive at +Rp 178 billion from a -Rp 105 billion net loss in the third quarter on gains from associates.
- The cash cost ratio of net profit add depreciation minus sales as a percent of sales was at 82%.
- We use 72% as sales rise, to predict a next 12 months return to profit, Rp 2.1 trillion.

Value, cheap to assets

- JSMR has raised Rp 66 trillion of capital in the last six years.
- At the current market value of Rp 29.8 trillion, it’s at 2.5X sales, 0.27X assets, 1.11X equity with a 7.6% profitability & no yield yet.
- Our operating cashflow forecast is Rp 3.3 trillion. At 1.6% with no adjustment, this gives a slightly higher target price of Rp4,577.