Log in/register here
KLBF
Kalbe Farma, forecasting a breakout
🎯💊📈➡️ Rp2,077
12m free cashflow +Rp1,540bn ⬆️
July 30th, 2020
⏰ 1 minute read
⏰ 1 minute read
Watch the 3 minute explainer using the data file & model ⬇️
Sales
KLBF sales growth slowed down in the 2Q to 0% which was lower than our +2% forecast & a slowdown from the +8% growth in the 1Q. But sales did increase slightly from the 1Q. Distributor & consumer were the drivers with +7% growth , prescription sales fell -16%. We forecast a modest +5% 12 month sales growth to Rp24.2tn.
Cashflow
2Q operating cashflow was also just 2% below our forecast at Rp816bn, but lower investment spending meant a better than expected Rp589bn free cashflow & Rp1.54tn for the last 12 months (excluding working capital). That’s up from Rp854bn as of the 1Q. With our forecast sales growth, the free cashflow will rise further to Rp1.73tn in the next 12 months.
KLBF sales growth slowed down in the 2Q to 0% which was lower than our +2% forecast & a slowdown from the +8% growth in the 1Q. But sales did increase slightly from the 1Q. Distributor & consumer were the drivers with +7% growth , prescription sales fell -16%. We forecast a modest +5% 12 month sales growth to Rp24.2tn.
Cashflow
2Q operating cashflow was also just 2% below our forecast at Rp816bn, but lower investment spending meant a better than expected Rp589bn free cashflow & Rp1.54tn for the last 12 months (excluding working capital). That’s up from Rp854bn as of the 1Q. With our forecast sales growth, the free cashflow will rise further to Rp1.73tn in the next 12 months.
Strong sales, higher cashflow & dividend, shares to breakout...
Balance sheet
KLBF balance sheet has been consistently in net cash & the level was Rp2.32tn as at the end of the 2Q. That’s lower than Rp2.78tn in the Q, because of paying the annual dividend. With our forecast for higher cashflow ahead & assuming the next dividend is higher at Rp1.12tn, net cash would rise to Rp2.9tn in 12 months time.
Profit
Net profit was up 9% from a year ago despite the flat sales as the cash cost ratio (Net profit add back depreciation minus sales as a % of sales) improved one percent to 85%. The 12 month average is 86% & we use that to predict a next 12 months net profit Rp2.83tn which is an increase of +6%.
Value
KLBF current market value has risen to Rp73.4tn. That’s equivalent to 3.03x our sales forecast, 3.12x the value of the assets & 3.88x the equity with a profitability of 15%. Yield is forecast at 1.5%. We use our 1.6% cashflow valuation with a 10% discount as the cash & cashflow are strong. This gives a higher target price of Rp2,077.
KLBF balance sheet has been consistently in net cash & the level was Rp2.32tn as at the end of the 2Q. That’s lower than Rp2.78tn in the Q, because of paying the annual dividend. With our forecast for higher cashflow ahead & assuming the next dividend is higher at Rp1.12tn, net cash would rise to Rp2.9tn in 12 months time.
Profit
Net profit was up 9% from a year ago despite the flat sales as the cash cost ratio (Net profit add back depreciation minus sales as a % of sales) improved one percent to 85%. The 12 month average is 86% & we use that to predict a next 12 months net profit Rp2.83tn which is an increase of +6%.
Value
KLBF current market value has risen to Rp73.4tn. That’s equivalent to 3.03x our sales forecast, 3.12x the value of the assets & 3.88x the equity with a profitability of 15%. Yield is forecast at 1.5%. We use our 1.6% cashflow valuation with a 10% discount as the cash & cashflow are strong. This gives a higher target price of Rp2,077.
