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MNCN, a 152% higher target price
Current 990 Target 2,491 +152%
November 24th 2021
1 minute read
Sales declined-19%
Costs 7 points higher
Cashflow higher with positive working capital
Balance sheet, lower leverage
Valuation, a 152% higher target price
1 minute read
Sales declined-19%
- Sales declined -19% in the third quarter to 2,210 billion rupiah vs our 2,532 billion rupiah forecast.
- This brings the quarterly average to 4% growth.
- We predict average growth of 5% to bring sales to 2,615 billion rupiah in the third quarter of 2022.
Costs 7 points higher
- The cash cost ratio was 7 points higher at -69% in the third quarter giving a 546 billion rupiah net profit.
- The average Cashflow cost ratio is at -75% now.
- We use -71% cost ratio to predict a 611 billion rupiah profit in the third quarter of 2022.
Cashflow higher with positive working capital
- Free cashflow was higher 747 billion rupiah in the third quarter with positive working capital -187 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at 398 billion rupiah now.
- We assume the same -187 billion rupiah investment spending which with higher sales gives a 558 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, lower leverage
- Cash increased from 870 to 1,080 billion rupiah in the third quarter.
- Liabilities declined from 3,659 to 3,377 billion rupiah so net cash improved from -2,789 to -2,297 billion rupiah.
- With our forecast cashflow & a -648 billion rupiah equity payout net cash will be -936 billion rupiah in 12 months time.
Valuation, a 152% higher target price
- MNCN capital from the last 27 quarters was higher at 5,381 billion rupiah in the third quarter with a -174 billion rupiah liabilities payment & a -120 billion rupiah equity payment & will be 6,595 billion rupiah in12 months time.
- At the current market value of 13,160 billion rupiah based on our forecasts it’s at 0.63 X assets with a 10 years payback & a 5% yield.
- Our cashflow forecast is 1,948 billion rupiah which means an 7 X valuation. A 17 X valuation gives a 152% higher target price of 2,491 rupiah.
