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LINK, at 0.49X assets
Current, target price Rp4,450, 4,538 (+2%)
June 7th, 2021
1 minute read
Sales seasonally lower
Cashflow negative on high investment spend
1 minute read
Sales seasonally lower
- Sales sales declined seasonally by -2% in the first quarter to 1,069 billion rupiah which is 2% above our forecast.
- This is after +7% growth in the fourth quarter & brings the average quarterly growth to +3%.
- We predict another +3% average growth in this next 12 months which will bring sales up to 1,179 billion rupiah by the first quarter of 2022.
Cashflow negative on high investment spend
- Cashflow was at -199 billion rupiah in the first quarter after-250 billion rupiah in the fourth quarter as investment spending has increased.
- The average quarterly Cashflow is now at -78 billion rupiah.
- We assume lower average investment spending of -471 billion rupiah which with the higher sales gives a positive average quarterly Cashflow of 83 billion rupiah in this next 12 months.
Balance sheet, higher leverage
Profit, higher
Value, 0.49X assets
- With negative cashflow the net leverage of cash minus total liabilities was -2,989 billion rupiah in the first quarter from -2,817 billion rupiah in the fourth quarter & -2,168 billion rupiah a year ago.
- With our forecast positive cashflow & assuming a dividend payout of-230 billion rupiah…
- .. the net leverage will be -2,885 billion rupiah in 12 months time.
Profit, higher
- Net profit was slightly higher at 249 billion rupiah in he first quarter after 242 billion rupiah in the fourth quarter.
- The cash cost ratio of net profit add depreciation minus sales as a percent of sales was flat at -52%.
- We use the same -52% costs to predict a higher next 12 months profit of 1,149 billion rupiah.
Value, 0.49X assets
- LINK net capital from the last six years is down to 647 billion rupiah…
- At the current market value of 12,245 billion rupiah, based on our forecasts, it’s at 13.82X capital paid, 2.67X sales, 0.49X assets, 2.16X equity, with a 20.2% profitability & a 1.9% yield.
- Our free cashflow forecast is 333 billion rupiah. At 1.6% with a 0.6X adjustment gives a 2% higher target price of 4,538 rupiah.
