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LPPF, a 65% higher target price
Current 2,810 Target 4,636 +65%

November 6th 2021
1 minute read

Sales slumped -78%

• Sales slumped again by -78% in the third quarter to a new low 320 billion rupiah vs our 801 billion rupiah forecast.
• This brings the quarterly average to 9% growth.
• We predict average growth of 59% in this next 12 months to bring sales back to 1,301 billion rupiah in the third quarter of 2022.

Costs, higher non cash costs but lower cost ratio…

• The cash cost ratio was at -58% in the third quarter giving a -94 billion rupiah net profit with higher non cash costs.
• The Cashflow cost ratio is at -133% now.
• We use a recent average -76% cost ratio as sales recover to predict a 135 billion rupiah profit in the third quarter of 2022.

Cashflow negative again

• Free cashflow was negative again -430 billion rupiah in the third quarter with -9 billion rupiah investment Cashflow.
• Average quarterly Cashflow is down to 256 billion rupiah now.
• We assume -9 billion rupiah investment spending which with higher sales gives a 229 billion rupiah Cashflow in the third quarter of 2022.

Balance sheet, but lower leverage

• Cash declined from 1,018 to 469 billion rupiah in the third quarter.
• Liabilities declined from 5,313 to 4,717 billion rupiah so net cash managed to improve from -4,295 to -4,248 billion rupiah
• With our forecast cashflow & a -110 billion rupiah equity payout net cash will be -3,842 billion rupiah in 12 months time.

Valuation, a 65% higher target price

• LPPF capital from the last 27 quarters was slightly higher at 7,742 billion rupiah in the third quarter & will be 8,727 billion rupiah in12 months time.
• At the current market value of 6,749 billion rupiah based on our forecasts it’s at 1.31 X assets with a 7 years payback & a 2% yield.
• Our cashflow forecast is 742 billion rupiah which means an 9 X valuation. A 15 X valuation gives a 65% higher target price of 4,636 rupiah.

Data file & model