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MAPA, cash will return post investments
🎯 🏃‍♀️ 📈 Rp5,702
Last 12-month cashflow -Rp 622 billion ⬇️

November 28th, 2020
1 minute read

Sales
After two very negative growth quarters, sales rebounded by +56% in the third quarter from the second quarter. The sales at Rp 1.02 trillion was 23% below our optimistic forecast. The cashflow receipts had an even bigger jump of +68%! We expect sales to continue to recover back to Rp 1.5 trillion by the third quarter of next year, 2021.

Cashflow
Cashflow ex working capital improved to a negative -Rp 85 billion from -Rp 153 billion in the second quarter & -Rp 468 billion in the first. There’s been several acquisitions which increased investment spending. We now expect investment spending to reduce & with higher sales this will bring average quarterly cashflow to a positive Rp 93 billion this next 12 months.

Sales recovery, cashflow will return to positive post acquisitions, net cash will be back, cheap valuation, higher target price...

Data file & model
Balance sheet
Because of the investments & negative cashflow this year, the balance sheet has turned from net cash to net debt in the third quarter, Rp 39 billion. But with our forecast lower investment spending & positive cashflow plus a dividend of Rp 13 billion, the balance sheet will return to a net cash Rp 320 billion in 12 months time.

Profit
Depreciation from leases is still high but losses improved too to -Rp 39 billion from -Rp 147 billion in the second quarter. The cash cost ratio of net profit add back depreciation minus saws as a % of sales improved to 90%. We use 89% as sales recover to predict a return to net profit Rp 27 billion this 12 months.

Value
MAPA is a capital payer. Payments have risen again in the third quarter to Rp 686 billion. At Rp 2.6 trillion, it’s 3.81X capital paid, 0.47X sales, 0.46X assets, 0.91X equity with a 1% profitability & a 0.5% yield. Our cashflow forecast is Rp 372 billion. At 1.6% with a 0.7X adjustment because of net cash, gives a higher target Rp5,702.
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