## RALS, only 2.2X capital paid

Current, target price Rp775, 2,277 (+194%)

May 2nd , 2021

1 minute read

Sales, seasonally lower

Cashflow, will maintain positive average

1 minute read

Sales, seasonally lower

- Sales declined seasonally by -20% in the first quarter to 398 billion rupiah, which is -15% compared to our forecast.
- This is after a 45% increase in the fourth quarter & brings the quarterly average growth to -10%.
- We predict average growth of 39% a quarter in this next 12 months which will bring sales to 947 billion rupiah by the first quarter of 2022.

Cashflow, will maintain positive average

- Cashflow was negative -437 billion rupiah in the first quarter after negative -152 billion rupiah in the fourth quarter on higher investment spending.
- Average quarterly cashflow is still positive 114 billion rupiah.
- We use lower investment spending of -33 billion rupiah, which with higher sales, gives a slightly higher average quarterly cashflow of 123 billion rupiah in this next 12 months.

## Down seasonally, but expecting a recovery in sales, margins & maintain positive annual Cashflow, means only 2.2X capital paid, higher target price...

Balance sheet, will head back towards net cash

Profit, will head back to profit

Value, only 2.2X capital paid

- With negative cashflow, the net leverage of cash minus total liabilities was -449 billion rupiah in the first quarter from -12 billion rupiah in the fourth quarter but better than -2,772 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -71 billion rupiah...
- ...net cash will be -28 billion rupiah in 12 months time.

Profit, will head back to profit

- The net loss was bigger at -86 billion rupiah in the first quarter from -44 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 -91%.
- We use -84% costs as sales rise, to predict a positive next 12 months profit of 141 billion rupiah.

Value, only 2.2X capital paid

- RALS cumulative net capital is at +1,997 billion rupiah from the last six years.
- At the current market value of 5,225 billion rupiah, based on forecasts it’s only 2.22X capital paid, 1.32X sales, 1.06X assets, 1.41X equity, with a 3.8% profitability & a 1.4% yield.
- Our free cashflow forecast is 491 billion rupiah. At 1.6% with a 0.5X adjustment, gives a 194% higher target price of 2,277 rupiah.