## PGAS, much higher target price

Current, target price Rp1,320, 4,573 (+246%)

April 10th, 2021

1 minute read

Sales, expecting positive growth

Cashflow, expecting positive too

1 minute read

Sales, expecting positive growth

- Sales increased by 8% in the fourth quarter to 735 million dollars which is 2% below our forecast.
- This is after a 15% increase in the third quarter and brings the average quarterly growth to -6%,
- We predict a positive average quarterly growth of 6% in this next 12 months which will bring sales to 932 million dollars by the fourth quarter of 2021.

Cashflow, expecting positive too

- Cashflow was negative again -24 million dollars in the fourth quarter from +145 million dollars in the third quarter.
- This brings the average quarterly free Cashflow to 115 million dollars. We use a slightly lower quarterly investment spending of 60 million dollars which with higher sales gives a positive average quarterly free cash flow of 64 million dollars in this next 12 months.

## Sales up, lower margins & cashflow negative, higher leverage, but expecting positive cashflow again, only 0.12X assets, much higher target price...

Balance sheet, expecting lower leverage

Profit, expecting better margins

Value, a much higher target price

- The balance sheet net leverage of cash minus total liabilities was at -3.4 billion dollars in the fourth quarter from -3,07 billion dollars in the third quarter and -3.1 billion dollars a year ago.
- With our free cashflow forecast and assuming a 94 million dollars dividend payout...
- ...the net cash will improve at -3.24 billion dollars in 12 months time.

Profit, expecting better margins

- The fourth quarter was a net loss -300 million dollars from a 50 million dollars net profit in the third quarter on higher non-cash costs.
- The cash cost ratio of net profit and back non-cash costs minus sales as a percent of sales was higher at 96%.
- As sales recover we use an 85% cost ratio to predict a next 12 months positive net profit of 317 million dollars.

Value, a much higher target price

- PGAS has paid out 1.17 billion dollars in the last five years.
- At the current market value of 2.29 billion dollars, It’s at 1.95X capital paid, 0.7X sales. 0.12X assets, 0.72 X equity with a 10% profitability and a 4.1% yield.
- Our free cashflow forecast is 254 million dollars. At a 1.6% valuation with a 0.5X adjustment, this gives a 246% higher target price of Rp4,573.