## MBTO, only 0.13X assets

Current, target price Rp113, 134 (+19%)

**Sales lower again...,****margins down,****cashflow negative,****but only 0.13X assets,****expecting a sales recovery**

June 6th, 2021

1 minute read

Sales, down further

Cashflow, negative again

1 minute read

Sales, down further

- Sales declined by -27% in the first quarter to only 50 billion rupiah, which is -26% compared to our forecast.
- This is after an 11% increase in the fourth quarter & brings the quarterly average growth to -12%.
- We predict average growth of 14% a quarter in this next 12 months which will bring sales to 82 billion rupiah by the first quarter of 2022.

Cashflow, negative again

- Cashflow was negative -4 billion rupiah in the first quarter after negative -4 billion rupiah in the fourth quarter.
- Average quarterly cashflow is now negative -1 billion rupiah.
- We use zero investment spending, which with higher sales, gives a higher average quarterly cashflow of 1 billion rupiah in this next 12 months.

Balance sheet, higher leverage

Profit, higher loss

Value, only 0.13X assets

- With negative cashflow, the net leverage of cash minus total liabilities was -391 billion rupiah in the first quarter from -364 billion rupiah in the fourth quarter & -353 billion rupiah a year ago.
- With our forecast higher cashflow & assuming no dividend payout ...
- ...net leverage will be -395 billion rupiah in 12 months time.

Profit, higher loss

- Net loss was bigger at -121 billion rupiah in the first quarter from -38 billion rupiah in the fourth quarter.
- The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was up to -203%.
- We use -99% costs as sales recover, to predict a lower next 12 months loss of -26 billion rupiah.

Value, only 0.13X assets

- MBTO cumulative net capital is at -119 billion rupiah from the last six years.
- At the current market value of 121 billion rupiah, based on forecasts it’s 0.38X sales, 0.13X assets, 0.22X equity, with no profitability & no yield yet.
- Our free cashflow forecast 3.8 x billion rupiah. At 1.6% with a 0.6X adjustment, gives a 19% higher target price of 134 rupiah.