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PWON, a 26% higher target price
Current 530 Target 668 +26%
November 25th 2021
1 minute read
Sales declined-1%
Costs improved 6 points
Cashflow average rising to new high
Balance sheet, lower leverage
Valuation, capital payouts recovering, a 26% higher target price
1 minute read
Sales declined-1%
- Sales declined -1% in the third quarter to 1,329 billion rupiah vs our 1,303 billion rupiah forecast.
- This brings the quarterly average to 6% growth.
- We predict average growth of 6% to bring sales to 1,684 billion rupiah in the third quarter of 2022.
Costs improved 6 points
- The cash cost ratio was 6 points lower at -61% in the third quarter giving a 274 billion rupiah net profit.
- The average Cashflow cost ratio is lower at -54% now.
- We use -60% cost ratio to predict a 518 billion rupiah profit in the third quarter of 2022.
Cashflow average rising to new high
- Free cashflow was lower at 246 billion rupiah in the third quarter with -92 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at 413 billion rupiah now.
- We assume the same -92 billion rupiah investment spending which with higher sales gives a 587 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, lower leverage
- Cash increased from 5,802 to 5,927 billion rupiah in the third quarter.
- Liabilities declined from 10,911 to 10,275 billion rupiah so net cash improved from -5,109 to -4,348 billion rupiah.
- With our forecast cashflow & a -560 billion rupiah equity payout net cash will be -2,763 billion rupiah in 12 months time.
Valuation, capital payouts recovering, a 26% higher target price
- PWON capital from the last 27 quarters increased again to 1,517 billion rupiah in the third quarter with a -118 billion rupiah liabilities payment & will be 3,983 billion rupiah in12 months time.
- At the current market value of 25,520 billion rupiah based on our forecasts it’s at 0.91 X assets with a 11 years payback & a 2% yield.
- Our cashflow forecast is 2,145 billion rupiah which means an 12 X valuation. A 15 X valuation gives a 26% higher target price of 668 rupiah.
