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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
  • 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
  • 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.