Other stocks here
LINK, high investment spending, a -24% lower target price
Current 4,470 Target 3,401 -24%
November 30th 2021
1 minute read
Sales flat
Costs 1 point lower, profit flat
Cashflow more negative on higher investment
Balance sheet, more leverage
Valuation, expensive, a -24% lower target price
1 minute read
Sales flat
- Sales were flat 0% growth in the third quarter to 1,086 billion rupiah vs our 1,134 billion rupiah forecast.
- This brings the quarterly average to 2% growth.
- We predict slightly faster average growth of 3% in this next 12 months to bring sales to 1,209 billion rupiah in the third quarter of 2022.
Costs 1 point lower, profit flat
- The cash cost ratio was 1 point lower at -53% in the third quarter giving a 215 billion rupiah net profit.
- The average Cashflow cost ratio is higher at -67% now.
- We use the latest -53% cost ratio to predict a 274 billion rupiah profit in the third quarter of 2022.
Cashflow more negative on higher investment
- Free cashflow was more negative -455 billion rupiah in the third quarter with higher -798 billion rupiah investment spending.
- Average quarterly Cashflow is at -275 billion rupiah now.
- We assume lower -523 billion rupiah investment spending which with higher sales gives a q47 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, more leverage
- Cash increased from 281 to 426 billion rupiah in the third quarter.
- Liabilities jumped from 3,772 to 4,256 billion rupiah so net cash worsened from -3,491 to -3,830 billion rupiah.
- With our forecast cashflow & a -201 billion rupiah equity payout net cash will be -3,915 billion rupiah in 12 months time.
Valuation, expensive, a -24% lower target price
- LINK capital from the last 27 quarters dropped to 816 billion rupiah in the third quarter with 873 billion rupiah new liabilities & a -283 billion rupiah equity payout & will be 932 billion rupiah in12 months time.
- At the current market value of 12,300 billion rupiah based on our forecasts it’s at 0.71 X assets with a 47 years payback & a 2% yield.
- Our 12 month cashflow forecast is 187 billion rupiah which means an 65.7 X valuation. A 50 X valuation gives a -24% lower target price of 3,401 rupiah.
