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RANC, a strong 2020
🎯 🛒 📈 Rp1,747
Last 12-month cashflow +Rp 54 billion ⬆️
January 5th, 2021
1 minute read
Sales
After jumping at the beginning of 2020 & a strong second quarter, sales dropped -15% in the third quarter to Rp 698 billion. The 12-month growth rate has slowed to +5% from +8%. We expect sales we start to increase again from the fourth quarter at a slower +3% annual rate & reach Rp 770 billion by third quarter 2021.
Cashflow
Despite the slower sales, cashflow was higher in the third quarter at Rp 26 billion, up from Rp 22 billion in the second quarter, excluding working capital. Investment spending is slowing down again & we assume that this continues. Combined with higher sales this gives an average quarterly free cashflow forecast of Rp 22 billion for this next 12 months.
1 minute read
Sales
After jumping at the beginning of 2020 & a strong second quarter, sales dropped -15% in the third quarter to Rp 698 billion. The 12-month growth rate has slowed to +5% from +8%. We expect sales we start to increase again from the fourth quarter at a slower +3% annual rate & reach Rp 770 billion by third quarter 2021.
Cashflow
Despite the slower sales, cashflow was higher in the third quarter at Rp 26 billion, up from Rp 22 billion in the second quarter, excluding working capital. Investment spending is slowing down again & we assume that this continues. Combined with higher sales this gives an average quarterly free cashflow forecast of Rp 22 billion for this next 12 months.
Sales to keep rising at a slower rate, lower investment, higher cashflow, growing net cash & cheap to assets, shares to triple...
Balance sheet
Despite the positive cashflow, working capital was a large negative & so third quarter net cash fell to Rp 214 billion from Rp 300 billion in the second quarter. With our forecast for positive cashflow ahead & assuming there’s a dividend payout of Rp 20 billion, net cash will rise back up to Rp 281 billion in 12 months time.
Profit
With lower sales, the third quarter net profit halved back to Rp 13 billion from Rp 30 billion in the second quarter. The cash costs ratio of net profit add back depreciation minus sales as a percent of sales was flat at 93%. We use the same 93% to predict a lower next 12 months profit of Rp 66 billion.
Value
RANC has paid out net capital of Rp 182 billion in the last five years. At the current market value Rp 686 billion, it’s 3.76X capital paid, 0.23X sales, 0.54X assets, 1.17X equity, with an 11.2% profitability & a 2.8% yield. Our cashflow forecast is Rp 87 billion. At 1.6% with a 0.5X adjustment, gives a higher target price Rp1,747.
Despite the positive cashflow, working capital was a large negative & so third quarter net cash fell to Rp 214 billion from Rp 300 billion in the second quarter. With our forecast for positive cashflow ahead & assuming there’s a dividend payout of Rp 20 billion, net cash will rise back up to Rp 281 billion in 12 months time.
Profit
With lower sales, the third quarter net profit halved back to Rp 13 billion from Rp 30 billion in the second quarter. The cash costs ratio of net profit add back depreciation minus sales as a percent of sales was flat at 93%. We use the same 93% to predict a lower next 12 months profit of Rp 66 billion.
Value
RANC has paid out net capital of Rp 182 billion in the last five years. At the current market value Rp 686 billion, it’s 3.76X capital paid, 0.23X sales, 0.54X assets, 1.17X equity, with an 11.2% profitability & a 2.8% yield. Our cashflow forecast is Rp 87 billion. At 1.6% with a 0.5X adjustment, gives a higher target price Rp1,747.
