## SMBR, strong fourth quarter

Current, target price Rp875, 1,241 (+42%)

April 11th, 2021

1 minute read

Sales, up

Cashflow, positive again

1 minute read

Sales, up

- Sales increased another +20% in the fourth quarter to 572 billion rupiah which is 13% ahead of our forecast.
- This is after a 51% jump in the third quarter, bringing average quarterly growth to positive 5%.
- We predict the same average quarterly growth 5% in this next 12 months, bringing sales to 649 billion rupiah by the fourth quarter 2021.

Cashflow, positive again

- Cashflow jumped to positive 187 billion rupiah in the fourth quarter after negative -33 billion rupiah in the third quarter.
- This brings average quarterly cashflow to positive +15 billion rupiah.
- We assume the same investment spending, 28 billion rupiah which with higher sales gives a positive average quarterly cashflow of +82 billion rupiah in this next 12 months.

## Sales up again, margins strong, high Cashflow, de leveraging, switch to a higher target price...

Balance sheet , lower leverage

Profit, strong margins

Value, upgrade to higher target

- With positive cashflow, the net leverage of cash minus total liabilities was -1.97 trillion rupiah in the fourth quarter from -2.2 trillion rupiah in the third quarter & -1.9 trillion a year ago.
- With our forecast positive cashflow & assuming a dividend payout of 94 billion...
- ...rupiah, net cash will improve to -1.67 trillion rupiah in 12 months time.

Profit, strong margins

- Net profit was +124 billion rupiah in the fourth quarter, up from +25 billion rupiah in the third quarter.
- The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was much lower at 70%.
- We use the average 77% costs to predict a higher next 12 months net profit of 314 billion rupiah.

Value, upgrade to higher target

- SMBR has raised 1.63 trillion rupiah of capital in the last five years.
- At the current market value of 10.6 trillion rupiah, it’s at 4.8X sales, 0.84X assets, 2.92X equity with a 8.6% profitability & a 0.9% yield.
- Our free cashflow forecast is now 329 billion rupiah. At 1.6% with a 0.6X adjustment gives a 42% higher target price of 1,241 rupiah.