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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
  • 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...

Data & financial model
Balance sheet
  • 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.
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