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PSDN, a 17% higher target price
Current, target price 179, 209 (+17%)
September 6th, 2021
1 minute read
Sales down
Costs above 100% but expected below
1 minute read
Sales down
- Sales declined by -18% in the second quarter to 206 billion rupiah which is well below our forecast 262 billion rupiah.
- This brings the average quarterly growth to 8%.
- We predict average growth of 7% in this next 12 months to bring sales to 262 billion rupiah in the second quarter of 2022.
Costs above 100% but expected below
- The cash cost ratio of net profit add non cash costs minus sales as a percent of sales was still above 100% at -108% in the second quarter & profit was flat at -22 billion rupiah.
- Average quarterly costs are now at -105%.
- We assume lower -98% costs to predict a 1.2 billion rupiah profit in the second quarter of 2022.
Cashflow negative to turn small positive
Balance sheet, slightly higher leverage
Value, a 17% higher target price
- Cashflow was negative again -11 billion rupiah with investment spending of 0 billion rupiah in the second quarter.
- Average quarterly Cashflow is also still negative at -8 billion rupiah.
- We use -0.4 billion rupiah investment spending which with higher sales gives a positive 5 billion rupiah cashflow by the second quarter of 2022.
Balance sheet, slightly higher leverage
- Cash increased from 14 to 24 billion rupiah in the second quarter.
- But liabilities also increased from 647 to 665 billion rupiah so net cash worsened from -633 to -641 billion rupiah.
- With our forecast cashflow & a tiny -0.3 billion rupiah equity payout, net cash will be -624 billion rupiah in 12 months time.
Value, a 17% higher target price
- PSDN capital from the last six years worsened to -229 billion rupiah in the second quarter.
- At the current market value of 258 billion rupiah, based on our forecasts, it’s at 0.35X assets with a 0% yield.
- Our free cashflow forecast is 18 billion rupiah. At 17X , this gives a 17% higher target price of 209 rupiah.
