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MBTO, there’s still demand
🎯 💄 📈 Rp127
Last 12-month cashflow -Rp 140 billion ⬇️
December 26th, 2020
1 minute read
Sales
Sales declined -23% in the third quarter. This brings the decline this year to -58%! At Rp 62 billion, sales were well below our Rp 83 billion forecast. But cashflow receipts were up to Rp 113 billion & while this is inventory, we assume demand is still there. We predict sales rise to Rp 110 billion by third quarter 2021.
Cashflow
Cashflow including working capital was a positive Rp 1 billion in the third quarter, but excluding the inventory sales it was -Rp 45 billion. Investment spending is now down to zero. Assuming low investment spending continues & is combined with a recovery in sales, gives a positive average quarterly free cashflow of +Rp 1 billion in this next 12 months.
1 minute read
Sales
Sales declined -23% in the third quarter. This brings the decline this year to -58%! At Rp 62 billion, sales were well below our Rp 83 billion forecast. But cashflow receipts were up to Rp 113 billion & while this is inventory, we assume demand is still there. We predict sales rise to Rp 110 billion by third quarter 2021.
Cashflow
Cashflow including working capital was a positive Rp 1 billion in the third quarter, but excluding the inventory sales it was -Rp 45 billion. Investment spending is now down to zero. Assuming low investment spending continues & is combined with a recovery in sales, gives a positive average quarterly free cashflow of +Rp 1 billion in this next 12 months.
Cashflow receipts up shows still demand, investment spending zero, cashflow can turn positive, shares already up this year, can rise further
Balance sheet
The inventory sales positive working capital has helped to stabilize net debt which was Rp 179 billion in the third quarter from Rp 182 billion in the second quarter, Rp 177 billion a year ago. With our forecast for some positive cashflow & a small Rp 1 billion dividend, net debt will be Rp 177 billion in 12 months time.
Profit
The net loss almost doubled to -Rp 38 billion in the third quarter & the cash cost ratio of net profit add back depreciation minus sales as a percent of sales was higher at 156%. Assuming a sales recovery, we predict an average 100% cost ratio & a positive +Rp 7 billion profit by the third quarter of next year.
Value
MBTO has raised a net capital of Rp 123 billion in the last five years. At the current market value of Rp 107 billion, it’s 0.27X sales, 0.21X assets, 0.73X equity with no profitability & a 0.6% yield. Our annualized cashflow forecast is Rp 8.7 billion. At 1.6% with a 0.25X adjustment gives a higher target price of Rp 127.
The inventory sales positive working capital has helped to stabilize net debt which was Rp 179 billion in the third quarter from Rp 182 billion in the second quarter, Rp 177 billion a year ago. With our forecast for some positive cashflow & a small Rp 1 billion dividend, net debt will be Rp 177 billion in 12 months time.
Profit
The net loss almost doubled to -Rp 38 billion in the third quarter & the cash cost ratio of net profit add back depreciation minus sales as a percent of sales was higher at 156%. Assuming a sales recovery, we predict an average 100% cost ratio & a positive +Rp 7 billion profit by the third quarter of next year.
Value
MBTO has raised a net capital of Rp 123 billion in the last five years. At the current market value of Rp 107 billion, it’s 0.27X sales, 0.21X assets, 0.73X equity with no profitability & a 0.6% yield. Our annualized cashflow forecast is Rp 8.7 billion. At 1.6% with a 0.25X adjustment gives a higher target price of Rp 127.
