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MBTO, lipstick red to green...
🎯 💄 📈Rp118
Last 12 months cashflow +Rp15bn ⬇️
September 16th, 2020
⏰ 1 minute read
⏰ 1 minute read
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Sales
Sales growth in the 2Q was -21%, the 7th negative growth in 10 quarters & well below our forecast. But... the main cosmetic sales increased by +5% from a year ago, +6% from 1Q & price discounting continues to reduce. As other sales are now 0, we see sales starting to increase from 2Q Rp80bn to Rp96bn by 2Q 2021.
Cashflow
Cashflow bounced back to a positive +Rp15bn in the 2Q excluding working capital. Including working capital, cashflow was also a small positive in the 1Q & the 2Q. Investment spending has come down recently & we assume this continues at close to 0. With our forecast higher sales now, cashflow will average +Rp2bn a quarter in this next 12 months.
Sales growth in the 2Q was -21%, the 7th negative growth in 10 quarters & well below our forecast. But... the main cosmetic sales increased by +5% from a year ago, +6% from 1Q & price discounting continues to reduce. As other sales are now 0, we see sales starting to increase from 2Q Rp80bn to Rp96bn by 2Q 2021.
Cashflow
Cashflow bounced back to a positive +Rp15bn in the 2Q excluding working capital. Including working capital, cashflow was also a small positive in the 1Q & the 2Q. Investment spending has come down recently & we assume this continues at close to 0. With our forecast higher sales now, cashflow will average +Rp2bn a quarter in this next 12 months.
Cosmetic sales growing..., positive cashflow, reducing debt, higher target price...
Balance sheet
The balance sheet is in net debt because of the years of negative cashflow. Net debt is Rp182bn as of the 2Q. But that’s an improvement from Rp183bn at the end of last year as they are starting to make a bit of money. With our forecast positive cashflow & no dividend, net debt will be Rp174bn in 12 months.
Profit
Net profit has remained a loss for most of the last 4 years as sales have declined. The cash cost ratio of net profit add depreciation minus sales as a % of sales was 118% in the 2Q. But the cashflow costs are at 96%. We use that to predict a lower net loss of -Rp9bn this next 12 months.
Value
MBTO has raised capital Rp120bn the last 5 years. As mentioned from lower net debt, they’re starting to make a bit of money now. At Rp83bn, it’s 0.23x sales, 0.15x assets, 0.46x equity with no profitability or yield. We raise our cashflow forecast to Rp8.1bn. At 1.6% with a 0.25x adjustment because of the debt, that’s a target price, Rp118.
The balance sheet is in net debt because of the years of negative cashflow. Net debt is Rp182bn as of the 2Q. But that’s an improvement from Rp183bn at the end of last year as they are starting to make a bit of money. With our forecast positive cashflow & no dividend, net debt will be Rp174bn in 12 months.
Profit
Net profit has remained a loss for most of the last 4 years as sales have declined. The cash cost ratio of net profit add depreciation minus sales as a % of sales was 118% in the 2Q. But the cashflow costs are at 96%. We use that to predict a lower net loss of -Rp9bn this next 12 months.
Value
MBTO has raised capital Rp120bn the last 5 years. As mentioned from lower net debt, they’re starting to make a bit of money now. At Rp83bn, it’s 0.23x sales, 0.15x assets, 0.46x equity with no profitability or yield. We raise our cashflow forecast to Rp8.1bn. At 1.6% with a 0.25x adjustment because of the debt, that’s a target price, Rp118.
