## 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

Cashflow, positive

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

Profit, lower on FX

Value, higher payouts

- 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.