## PSGO, cashflow turns positive

Current, target price Rp122, 145 (+19%)

May 7th, 2021

1 minute read

Sales, soared

Cashflow, turns positive

1 minute read

Sales, soared

- Sales soared by 52% in the first quarter to 349 billion rupiah, which is +27% compared to our forecast.
- This is after a 2% increase in the fourth quarter & brings the quarterly average growth to 11%.
- We predict average growth of 6% a quarter in this next 12 months which will bring sales to 435 billion rupiah by the first quarter of 2022.

Cashflow, turns positive

- Strong sales & an investment gain brought cashflow to positive 1 billion rupiah in the first quarter after positive billion rupiah in the fourth quarter.
- Average quarterly cashflow is now at -39 billion rupiah.
- We use investment spending of -53 billion rupiah, which with higher sales, gives a positive average quarterly cashflow of 16 billion rupiah in this next 12 months.

## Sales up over 50%, margins strong, cashflow turns positive with help from investment gains, 0.66X assets, higher target price...

Balance sheet,lower leverage

Profit, lower margin

Value, 0.66X assets

- With slightly positive cashflow, the net leverage of cash minus total liabilities was -1,952 billion rupiah in the first quarter from -1,991 billion rupiah in the fourth quarter & -1,802 billion rupiah a year ago.
- With our forecast higher cashflow & assuming there is no dividend payout...
- ...net cash will be -1,889 billion rupiah in 12 months time.

Profit, lower margin

- Net profit was higher at 28 billion rupiah in the first quarter from 25 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 higher at -84%.
- We use lower -81% costs, to predict a higher next 12 months profit of 151 billion rupiah.

Value, 0.66X assets

- PSGO cumulative net capital is at -1,670 billion rupiah from the last five years.
- At the current market value of 2,300 billion rupiah, based on forecasts it’s 1.58X sales, 0.66X assets, 1.65X equity, with a 10.9% profitability & a 0.0% yield.
- Our free cashflow forecast is 63 billion rupiah. At 1.6% with a generous 0.7X adjustment, gives a 19% higher target price of 145 rupiah.