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RANC, 0.62X assets, cheap
Current, target price IDR514, 877 (+71%)
Last, next 12-months cashflow +IDR 66, +44 billion

April 1st, 2021
1 minute read

Sales, a strong 2020
  • Sales increased 2% in the fourth quarter to IDR 709 billion, which is 2% below our forecast.
  • This is after -15% growth in the third quarter & brings the average quarterly growth to 5%.
  • We forecast slower growth of 2% a quarter in the next 12 months which will bring sales up to IDR 774 billion by the fourth quarter 2021.

Cashflow, high investment spending
  • Cashflow turned positive at IDR 48 billion in the fourth quarter up from -IDR 63 billion in the third quarter.
  • The average quarterly Cashflow is now at IDR 16 billion.
  • Assuming slower quarterly investment spending of IDR 28 billion together with higher sales, gives a slightly lower average quarterly free cashflow of IDR 11 billion in this next 12 months.

Sales strong in 2020, investment spending is high, & that’s increased leverage, but it’s 0.62X asssets with a 2.5% yield, higher target price...

Balance sheet, higher leverage
  • Despite positive cashflow, the net leverage, cash minus total liabilities, was at -IDR 493 billion in the fourth quarter from -IDR 475 billion in the third quarter & -IDR 146 billion a year ago.
  • With our forecast higher free cashflow and assuming an IDR 20 billion dividend payment...
  • ...the net cash will be -IDR 428 billion in 12 months time.

Profit, better margins
  • Net profit was lower at IDR 10 billion in the fourth quarter down from IDR 13 billion in the third quarter.
  • The cash cost ratio of net profit and back depreciation minus sales as a percent of sales was higher at 94%.
  • We use a lower 93% costs to predict a flat next 12 months net profit of IDR 67 billion

Value, 0.62X assets
  • RANC has paid out IDR 132 billion of capital the last five years.
  • At the current market value of IDR 802 billion, it’s 6X capital paid, 0.27X sales 0.62X assets 1.36X equity with an 11.3% profitability and 2.5% yield.
  • Our free cashflow forecast is IDR 44 billion. At 1.6% with a 0.5X adjustment gives a higher target price of IDR877.