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ROTI, already at 20X, a 24% higher target price
Current, target price 1,365, 1,698 (+24%)

October 27th, 2021
1 minute read

Sales up 14%

• Sales were up by 14% in the third quarter to 878 billion rupiah which is well above our forecast 793 billion rupiah.
• This brings the average quarterly growth to 0%.
• We predict average growth of 5% in this next 12 months to bring sales to 1,045 billion rupiah in the third quarter of 2022.

Costs down a point

• The cash cost ratio was one point lower at -85% in the third quarter & profit increased to 88 billion rupiah.
• Cashflow costs are now even lower at -80%.
• We use the latest -85% costs to predict a higher 113 billion rupiah profit in the third quarter of 2022.

Data file & model

Cashflow jumps to a record

• Cashflow jumped to a record 196 billion rupiah with low investment spending of -40 billion rupiah in the third quarter.
• Average quarterly Cashflow has now increased to 104 billion rupiah.
• We use the same -40 billion rupiah investment spending which with higher sales gives a 114 billion rupiah cashflow in the third quarter of 2022.

Balance sheet, lower leverage

• Cash increased from 753 to 861 billion rupiah in the third quarter.
• Liabilities increased slightly from 1,275 to 1,306 billion rupiah so net cash improved from -522 to -445 billion rupiah.
• With our forecast cashflow & a -205 billion rupiah equity payout, net cash will be -219 billion rupiah in 12 months time.

Value,, already at 20X, a 24% higher target price

• ROTI capital from the last five years improved to -273 billion rupiah in the third quarter & will be positive 141 billion rupiah in 12 months time.
• At the current market value of 8,320 billion rupiah, based on our forecasts, it’s at 1.96X assets with an 8.2 years payback & a 2% yield.
• Our free cashflow forecast is 414 billion rupiah which is a 20X valuation. At a 25X valuation gives a 24% higher target price of 1,698 rupiah.