## RMBA, slightly higher target

Current, target price Rp292, 389 (+33%)

April 14th, 2021

1 minute read

Sales, finally up

Cashflow, seasonally negative

1 minute read

Sales, finally up

- Sales finally increased by 24% in the fourth quarter to 3.48 trillion rupiah which is 2% below our forecast.
- This is after a decline of -15% in the third quarter, bringing the quarterly average growth to -10%.
- We predict positive average quarterly growth of +9% in this next 12 months, bringing sales to 4.78 trillion rupiah by the fourth quarter of 2021.

Cashflow, seasonally negative

- Cashflow was -1.81 trillion rupiah in the fourth quarter because of normal negative working capital, after a positive 1.46 trillion rupiah in the third quarter.
- This brings the average quarterly cashflow to positive 175 billion rupiah.
- We use lower investment spending of 53 billion rupiah a quarter which with higher sales gives a quite conservative average quarterly cashflow of 63 billion rupiah in this next 12 months.

## Sales finally up, cashflow seasonally negative, but expecting a small positive & a slightly higher target price....

Balance sheet, better than a year ago

Profit, expecting a small margin

Value, slightly higher target

- Because of the working capital the net leverage of cash minus total liabilities was at -6,6 trillion rupiah in the fourth quarter from -5.4 trillion rupiah in the third quarter but better than -8.5 trillion rupiah a year ago.
- With our forecast positive Cashflow and assuming a dividend payout of 51 billion rupiah..,
- ...the net cash will improve to -6.3 trillion rupiah in 12 months time.

Profit, expecting a small margin

- The fourth quarter was a net loss of -2.1 trillion rupiah from -399 billion rupiah in the third quarter because of an impairment.
- The cash cost ratio of net profit add back non-cash costs minus sales as a percent of sales was higher at 118%.
- As sales recover we use 97% costs to predict a positive next 12 months net profit of 169 billion rupiah.

Value, slightly higher target

- RMBA has raised capital of 10.2 trillion rupiah in the last six years.
- At the current market value of 12.8 trillion rupiah, it’s at 0.7 7X sales, 1.04X assets, 2.2 X equity with a 2.9% profitability and a 0.4% yield.
- Our free cashflow forecast is 324 billion rupiah. At 1.6% with a generous 0.7X adjustment, gives a 33% higher target price of Rp389.