Other stocks here

LPCK, sales lower again
Current, target price Rp1,210, 1,705 (+41%)

June 16th, 2021
1 minute read

Sales down again

• Sales declined by -5% in the first quarter to 239 billion rupiah which is far below our forecast 537 billion rupiah.
• The average quarterly growth is now at -17%.
• We predict a better average quarterly growth of 15% in this next 12 months bringing sales back to 391 billion rupiah by the first quarter 2022.

Costs all over the place

• The first quarter cash costs ratio of net profit add non cash costs minus sales as a percent of sales was only -11% … with profit of 98 billion rupiah.
• The average cost ratio is now -152%…
• We use average costs of -78% in this next 12 months which gives a profit of 80 billion rupiah by the first quarter 2022.

Data file & model

Cashflow, to turn positive

• Operating Cashflow was negative & despite low investment spending, free cashflow was -71 billion rupiah in the first quarter.
• But that’s much better than the quarterly average -179 billion rupiah.
• We use the same -3 billion investment spending which with higher sales gives a positive average quarterly Cashflow 76 billion rupiah in this next 12 months.

Balance sheet, slightly higher leverage

• With negative cashflow, cash declined from 635 to 548 billion rupiah in the first quarter.
• Liabilities increased slightly from 3,141 to 3,177 billion rupiah, so net cash declined from -2,506 to -2,629 billion rupiah.
• With our forecast positive cashflow & an equity payout of -29 billion rupiah, at cash will improve to -2,354 billion rupiah in 12 months.

Value, only 0.33X assets

• LPCK net capital from the last six years improved slightly to -7,909 billion rupiah in the first quarter.
• At the current market value 3,242 billion rupiah, based on forecasts, it’s at 2.22X sales, 0.33X assets with a 0.9% yield.
• Our cashflow forecast is 305 billion rupiah. At 15X (6.7%) yield, gives a 41% higher target price of 1,705 rupiah.