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PALM, a slightly higher target price
Current, target price 448, 417 (-7%)
September 23rd, 2021
1 minute read
Sales up strongly
Costs higher but margins strong
1 minute read
Sales up strongly
- Sales grew a strong 34% in the second quarter to 90 billion rupiah. This is after a 30% increase in the first quarter.
- & brings the average quarterly growth to 13%.
- We predict average quarterly growth of 9% in the next 12 months to bring sales up to 126 billion rupiah in the second quarter of 2022.
Costs higher but margins strong
- The cash cost ratio increased in the second quarter to -75% from -68% & profit was at 19 billion rupiah.
- Cashflow costs are lower at -71%.
- So we use the -71% to predict a doubling of profit to 33 billion rupiah in the second quarter of 2022.
Cashflow doubles
Balance sheet, heading to net cash
Valuation, a slightly higher target price
- Cashflow more than doubled to 22 billion rupiah in the second quarter with lower investment spending of -4 billion rupiah.
- Average quarterly Cashflow is at 11 billion rupiah.
- We use the same -4 billion rupiah investment spending which with higher sales gives a higher 33 billion rupiah Cashflow in the second quarter of 2022.
Balance sheet, heading to net cash
- With positive cashflow, cash increased from 40 to 46 billion rupiah in the second quarter.
- Liabilities declined from 142 to 133 billion rupiah, so net cash improved from -102 to -87 billion rupiah.
- With our forecast higher cashflow & a -37 billion rupiah equity payout, net cash will be down to only -4 billion rupiah in 12 months time.
Valuation, a slightly higher target price
- PALM capital from the last four years increased to 1,224 billion rupiah in the second quarter.
- At the current value of 3,184 billion rupiah, based on our forecasts, it’s at 0.67X assets with a 1% yield.
- Our cashflow forecast is 131 billion rupiah which is a 24X valuation. At 25X gives a 3% higher target price of 461.
