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LPPF, sales & cashflow up
Target price Rp4,365
Last 12-month cashflow -Rp 1.3 trillion

February 17th,, 2021
1 minute read

Sales

• Sales (retail) increased by +40% in the fourth quarter to Rp 963 billion, after the +46% increase in the third quarter. Sales were 6% below our forecast.
• This brings the last 12 months average quarterly growth back up to 0%.
• We expect average growth of +15% this next 12 months; sales to reach Rp 1.5 trillion by fourth quarter 2021.

Cashflow

• Cashflow was seasonally strong in the fourth quarter at Rp 1.14 trillion after Rp 270 billion in the third quarter.
• Average quarterly Cashflow is negative -Rp 331 billion.
• Investment spending was Rp 448 billion, but we use the average Rp 120 billion spending, which with higher sales gives a positive average Rp 76 billion Cashflow in this next 12 months.

Sales rebound continues, cashflow positive again, paying out capital again, higher target price...

Data file & model

Balance sheet

• With positive cashflow, the fourth quarter balance sheet leverage of cash minus total liabilities was -Rp 5.2 trillion from -Rp 5.6 trillion in the third quarter, -Rp 6.4 trillion in the first quarter.
• With our forecast positive average cashflow & assuming a dividend payout of Rp 149 billion...
• ...the net cash will be -Rp 5.06 trillion in 12 months time.

Profit

• The net loss was -Rp 256 billion in the fourth quarter after -Rp 259 billion in the third quarter.
• The cash costs ratio of net profit add depreciation minus sales as a percent of sales was better at 119%.
• We use an average 85% costs as sales recover to predict a next 12 months positive profit of Rp 496 billion.

Value

• LPPF has still managed to pay capital of Rp 6.6 trillion in the last six years.
• At the current market value of Rp 3.3 trillion, it’s only 0.65X sales, 0.22X assets, 3.56X equity with a 53% profitability & a 4.5% yield.
• Our cashflow forecast is Rp 306 billion. At 1.6% with a 0.6X adjustment, gives a higher target price, Rp4,365.