## ROTI, heading to net cash

Current, target price Rp1,425, 1,926 (35%)

April 29th, 2021

1 minute read

Sales, up slightly

Cashflow, higher positive

1 minute read

Sales, up slightly

- Sales increased by 2% in the first quarter to 787 billion rupiah, which is -1% compared to our forecast.
- This is after a 1% increase in the fourth quarter & brings the quarterly average growth to -3%.
- We predict average growth of 5% a quarter in this next 12 months which will bring sales to 952 billion rupiah by the first quarter of 2022.

Cashflow, higher positive

- Cashflow was higher at 128 billion rupiah in the first quarter after 80 billion rupiah in the fourth quarter on lower investment spending.
- Average quarterly cashflow is now almost positive at -2 billion rupiah.
- We use flat investment spending of -40 billion rupiah, which with higher sales, gives a positive average quarterly cashflow of 72 billion rupiah in this next 12 months.

## Sales up a bit, higher cashflow on lower investment, heading back to net cash, not so cheap, but a higher target price...

Balance sheet, heading to net cash

Profit, still strong

Value, paying back capital

- With positive cashflow, the net leverage of cash minus total liabilities was -125 billion rupiah in the first quarter from -745 billion rupiah in the fourth quarter & -745 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -140 billion rupiah...
- ...net cash will turn positive 41 billion rupiah in 12 months time.

Profit, still strong

- Net profit was lower at 57 billion rupiah in the first quarter from 82 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 -87%.
- We use the same -87% costs, to predict a higher next 12 months profit of 281 billion rupiah.

Value, paying back capital

- ROTI cumulative net capital is at -758 billion rupiah for the last six years.
- At the current market value of 8,816 billion rupiah, based on our forecasts it’s at 2.5X sales, 1.9X assets, 2.6X equity, with a 8.2% profitability & a 1.6% yield.
- Our free cashflow forecast is 287 billion rupiah. At 1.6% with a 0.65X adjustment, gives a 32% higher target price of 1,884 rupiah.