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LSIP, an 11% yield
Target price Rp7,179
Last 12-month cashflow +Rp 937 billion
March 2nd,, 2021
1 minute read
Sales
Cashflow
1 minute read
Sales
- Sales jumped 77% in the fourth quarter to Rp 1.26 trillion after a -6% decline in the third quarter. Oil production increased 50%.
- Sales were 11% above our forecast.
- The average quarterly sales growth is now at 9%. We expect average growth to slow slightly to 5% & sales to reach Rp 1.53 trillion by the fourth quarter 2021.
Cashflow
- Cashflow was also higher at Rp 308 billion in the fourth quarter up from Rp 164 billion in the third quarter.
- Average quarterly Cashflow is at Rp 234 billion.
- Investment spending was Rp 131 billion & we use that in our forecast, which with higher sales gives a stronger average quarterly Cashflow Rp 392 billion in this next 12 months:
Sales up 77%, strong cashflow, into net cash, an 11% yield, shares to Rp7k...
Balance sheet
Profit
Value
- The balance sheet leverage of net cash minus total liabilities was positive Rp 332 billion in the fourth quarter from -Rp 194 billion in the third quarter, -Rp 595 billion a year ago.
- With our forecast for higher free cashflow & a dividend payout of Rp 1 trillion ...
- ...the net cash will be Rp 856 billion in 12 months time.
Profit
- Net profit was much higher at Rp 418 billion in the fourth quarter up from Rp 186 billion in the third quarter.
- The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was much lower, 59%.
- We use the average 63% costs to predict a stronger next 12 months profit, Rp 1.7 trillion.
Value
- LSIP has paid capital of Rp 1.5 trillion in the last six years.
- At the current market value, Rp 9.24 trillion, it’s 6.3X capital paid, 1.6X sales, 0.82X assets, 0.93X equity with a 17.3% profitability & a 11.2% yield.
- Our free cashflow forecast is Rp 1.57 trillion. At 1.6% with a 0.5X adjustment gives a higher target price of Rp7,179.
