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SMAR, only 0.2X sales…
Current, target price 3,850, 9,966 (159%)

August , 2021
1 minute read

Sales jump
  • Sales jumped by 14% in the second quarter to 12,685 billion rupiah which is above our forecast 11,655 billion rupiah.
  • This brings the average quarterly growth to 9%
  • We predict average growth of 3% in this next 12 months to bring sales to 13,990 billion rupiah in the second quarter 2022.

Costs stable
  • The cash cost ratio of net profit add on cash costs minus sales as a percent of sales was stable at -93% in the second quarter & profit jumped to 754 billion rupiah with FX gains.
  • Average quarterly costs are also now at -93%.
  • We use the same -93% costs to predict a 771 billion rupiah net profit in the second quarter of 2022.
Cashflow, negative on working capital
  • Cashflow was a big negative -1,452 billion rupiah despite low investment spending of -112 billion rupiah in the second quarter on working capital.
  • Average quarterly Cashflow has now returned to a negative -301 billion rupiah.
  • We use the same -112 billion rupiah investment spending which with higher sales gives a positive 895 billion rupiah cashflow in the second quarter 2022.

Balance sheet, higher leverage
  • With sale of investments cash increased in the second quarter from 2,921 to 3,497 billion rupiah.
  • Liabilities also increased from 23,475 to 24,157 billion rupiah so the net cash worsened slightly from -20,554 to -20,660 billion rupiah.
  • With our forecast positive cashflow & a -593 billion rupiah equity payout, the net cash will improve to -17,675 billion rupiah in 12 months time.

Value, only 0.2X sales…
  • SMAR capital from the last six years worsened to -5,684 billion rupiah in the second quarter.
  • At the current market value of 11,060 billion rupiah, based on our forecasts, it’s at only 0.20X sales & only 0.30 assets with a 5% yield.
  • Our free cashflow forecast is 3,579 billion rupiah. At 8X (a 12.5% yield), this gives a 159% higher target price of 9,966 rupiah.