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PWON, cashflow back to positive
Current, target price x, x (x)

  • Sales up again in recovery,
  • margin ok,
  • cashflow positive again on lower investment,
  • lower leverage,
  • higher payouts ahead
June 3rd, 2021
1 minute read

Sales
  • Sales increased by 20% in the first quarter to 1,116 billion rupiah, which is -9% compared to our forecast.
  • This is after a -13% decline in the fourth quarter & brings the quarterly average growth to 39%!
  • We predict average growth of 8% a quarter in this next 12 months which will bring sales back to 1,526 billion rupiah by the first quarter of 2022.

Cashflow, positive
  • Cashflow was positive 431 billion rupiah in the first quarter after negative -736 billion rupiah in the fourth quarter.
  • Average quarterly cashflow is still negative -84 billion rupiah.
  • We use flat investment spending of -91 billion rupiah, which with higher sales, gives a higher average quarterly cashflow of 562 billion rupiah in this next 12 months.
Balance sheet, lower leverage
  • With positive cashflow, the net leverage of cash minus total liabilities was -5,614 billion rupiah in the first quarter from -5,973 billion rupiah in the fourth quarter & -5,428 billion rupiah a year ago.
  • With our forecast higher cashflow & assuming a dividend payout of -592 billion rupiah...
  • ...net leverage will be -3,956 billion rupiah in 12 months time.

Profit, lower on FX
  • Net profit was higher at 254 billion rupiah in the first quarter from 388 billion rupiah in the fourth quarter on FX losses.
  • The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was up to -53%.
  • We use the same -53% costs, to predict a higher next 12 months profit of 1,974 billion rupiah.

Value, higher payouts
  • PWON cumulative net capital is at +3,364 billion rupiah from the last six years.
  • At the current market value of 24,077 billion rupiah, based on forecasts it’s 4.31X capital paid, 4.32X sales, 0.91X assets, 1.25X equity, with a 10.3% profitability & a 2.5% yield.
  • Our free cashflow forecast is 2,250 billion rupiah. At 1.6% with a 0.5X adjustment, gives a 192% higher target price of 1,460 rupiah.