## KEJU, a 6.3% yield

Current, target price Rp1,230, 3,104 (+152%)

May 28th, 2021

1 minute read

1 minute read

**Sales, up**- Sales increased by 17% in the first quarter to 250 billion rupiah, which is +8% compared to a year ago.
- This is after a -18% decline in the fourth quarter & brings the quarterly average growth to 4%.
- We predict average growth of 3% a quarter in this next 12 months which will bring sales to 281 billion rupiah by the first quarter of 2022.

**Cashflow, higher**- Cashflow was higher at 38 billion rupiah in the first quarter after 16 billion rupiah in the fourth quarter.
- Average quarterly cashflow is now positive 49 billion rupiah.
- We use flat investment spending of -4 billion rupiah, which with higher sales, gives a similar average quarterly cashflow of 47 billion rupiah in this next 12 months.

## Sales up, margins strong, cashflow higher, back in net cash, expecting a 6.3% yield, much higher target price…

**Balance sheet, back to net cash**

- With positive cashflow, the net leverage of cash minus total liabilities turned positive +23 billion rupiah in the first quarter from -18 billion rupiah in the fourth quarter & +11 billion rupiah a year ago.
- With our forecast positive cashflow & assuming a dividend payout of -117 billion rupiah...
- ...net cash will be +92 billion rupiah in 12 months time.

**Profit, higher**

- Net profit was higher at 37 billion rupiah in the first quarter from 2 billion rupiah 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 -82%.
- We use -81% costs, to predict a higher next 12 months profit of 167 billion rupiah.

**Value, a 6.3% yield**

- KEJU cumulative net capital is at 444 billion rupiah from the last five years.
- At the current market value of 1,845 billion rupiah, based on forecasts it’s 3.06X capital paid, 1.69X sales, 1.36X assets, 3.49X equity, with a 31.6% profitability & a 6.3% yield.
- Our free cashflow forecast is 186 billion rupiah. At 1.6% with a 0.4X adjustment, gives a 152% higher target price of 3,104 rupiah.