## SMAR, only 0.18X sales...

Target price Rp9,786

Last 12-months cashflow -Rp 665 billion

March 19th, 2021

1 minute read

Sales

Cashflow

1 minute read

Sales

- Sales jumped in the fourth quarter by 34% to Rp 12.23 trillion, which is 22% above our forecast.
- This is after negative growth in the first three quarters & brings the average quarterly growth to a positive 7%.
- We assume 3% quarterly growth in the next 12 months, bringing sales to Rp 13.49 trillion by the fourth quarter of 2021.

Cashflow

- Cashflow was back to negative -Rp 697 billion in the fourth quarter partly on higher investment spending.
- This is after +Rp 605 billion in he third quarter & brings the average quarterly Cashflow to -Rp 166 billion.
- We assume lower investment spending which with higher sales, gives a positive average quarterly Cashflow Rp 375 billion in this next 12 months.

## Higher sales, but lower Cashflow & raising more capital... Cashflow to turn positive again, only 0.18X sales, higher target price...

Balance sheet

Profit

Value

- The balance sheet net of cash minus total liabilities was -Rp 19.7 trillion in the fourth quarter from -Rp 17 trillion in the third quarter, -Rp 15.9 trillion a year ago.
- With our forecast for positive free cashflow & assuming there is a dividend payout of Rp 393 billion ...
- ...net cash will be Rp 18.57 trillion in 12 months time.

Profit

- Net profit was higher at Rp 1.3 trillion in the fourth quarter from Rp 204 billion in the third quarter on FX gains.
- The cash cost ratio of net profit add depreciation minus sales as a percent of sales was higher, 95%.
- We use the average 94% costs to predict a higher next 12 months net profit, Rp 1.96 trillion.

Value

- SMAR has raised total capital of Rp 4.6 trillion in the last six years.
- At the current market value of Rp 9 trillion, it’s at just 0.18X sales, 0.12X assets,, 0.64X equity with a 13.9% profitability & a 4.3% yield.
- Our cashflow forecast is Rp 1.5 trillion. At 1.6% with a 0.3X adjustment, gives a higher target price of Rp9,786.