## RANC, only 0.27X sales

Current, target price Rp510, 813 (+59%)

May 8th , 2021

1 minute read

Sales, higher again

Cashflow, negative

1 minute read

Sales, higher again

- Sales increased again by 2% in the first quarter to 726 billion rupiah, which is +2% compared to our forecast.
- This is after a 2% increase in the fourth quarter & brings the quarterly average growth to -1%.
- We predict average growth of +1% a quarter in this next 12 months which will bring sales to 755 billion rupiah by the first quarter of 2022.

Cashflow, negative

- Cashflow was negative -55 billion rupiah in the first quarter after positive 48 billion rupiah in the fourth quarter on higher lease expenses.
- Average quarterly cashflow is now positive just 2 billion rupiah.
- We use lower investment spending of -26 billion rupiah, which with higher sales, gives a higher average quarterly cashflow of 10 billion rupiah in this next 12 months.

## Sales higher again, margins lower, cashflow negative, higher leverage from leases, but higher cashflow ahead, cheap at only 0.27X sales, a capital payer & a higher target price...

Balance sheet, higher leverage from leases

Profit, lower

Value, only 0.27X sales

- From higher leases, the net leverage of cash minus total liabilities was -572 billion rupiah in the first quarter from -493 billion rupiah in the fourth quarter & -365 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -19 billion rupiah...
- ...net cash will improve to -493 billion rupiah in 12 months time.

Profit, lower

- Net profit was lower at 5 billion rupiah in the first quarter from 10 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 up to -95%.
- We use lower -93% costs, to predict a slightly higher next 12 months profit of 65 billion rupiah.

Value, only 0.27X sales

- RANC cumulative net capital is at +147 billion rupiah from the last five years.
- At the current market value of 798 billion rupiah, based on forecasts it’s 4.26X capital paid, only 0.27X sales, 0.61X assets, 1.34X equity, with a 10.9% profitability & a 2.4% yield.
- Our free cashflow forecast is 41 billion rupiah. At 1.6% with a 0.5X adjustment, gives a 59% higher target price of 813 rupiah.