## MLBI, de leveraging fast

Current, target price Rp9,375, 19,218 (+105%)

April 27th , 2021

1 minute read

Sales, down seasonally

Cashflow, receipts higher

1 minute read

Sales, down seasonally

- Sales declined seasonally by -16% in the first quarter to 581 billion rupiah, which is -15% compared to our forecast.
- This is after a 41% increase in the fourth quarter & brings the quarterly average growth to 34%.
- We predict average growth of 11% a quarter in this next 12 months which will bring sales to 837 billion rupiah by the first quarter of 2022.

Cashflow, receipts higher

- Cashflow was positive 406 billion rupiah in the first quarter up from positive 334 billion rupiah in the fourth quarter.
- Average quarterly cashflow is now positive 128 billion rupiah.
- We use flat investment spending of -35 billion rupiah, which with higher sales, gives a higher average quarterly cashflow of 251 billion rupiah in this next 12 months.

## Sales seasonally lower, but cashflow receipts strong, margins improving, strong cashflow, de leveraging fast, shares to double...

Balance sheet, de leveraging fast

Profit, margins returning

Value, a 3.1% yield

- With positive cashflow, the net leverage of cash minus total liabilities was -608 billion rupiah in the first quarter from -841 billion rupiah in the fourth quarter & -1,264 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -610 billion rupiah...
- ...net cash will be -215 billion rupiah in 12 months time.

Profit, margins returning

- Net profit was higher at 149 billion rupiah in the first quarter from 133 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 down to -63%.
- We use the same -63% costs, to predict a higher next 12 months profit of 871 billion rupiah.

Value, a 3.1% yield

- MLBI cumulative net capital is at +4,543 billion rupiah in the last six years.
- At the current market value of 19,758 billion rupiah, based on forecasts it’s 3.6X capital paid, 4.6X sales, 6.2X assets, 10.7X equity, with a 47.2% profitability & a 3.1% yield.
- Our free cashflow forecast is 999 billion rupiah. At 1.6% with a 0.65 adjustment, gives a 105% higher target price of 19,255 rupiah.