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SMGR, turning net capital payer again
Target price Rp21,982
Last 12-month cashflow +Rp 4.6 trillion
March 1st,, 2021
1 minute read
Sales
Cashflow
1 minute read
Sales
- Sales fell 1% in the fourth quarter to Rp 9.55 trillion after the 29% jump in the third quarter, -13% drop in the second.
- Sales were 6% below our forecast.
- The average quarterly sales growth is now at -4%. We expect average growth to turn positive by 7% & sales to reach Rp 12.46 trillion by the fourth quarter 2021.
Cashflow
- Cashflow was lower at Rp 763 billion in the fourth quarter, down from Rp 2.28 trillion in the third quarter.
- Average quarterly free Cashflow is now at Rp 1.15 trillion.
- We use the same as the latest investment spending, Rp 1.29 trillion, which with higher sales gives a higher average quarterly Cashflow Rp 1.16 trillion in this next 12 months.
Sales growth to turn positive, strong cashflow, turning back to capital payer, shares to rise above Rp20k...
Balance sheet
Profit
Value
- The balance sheet leverage of net cash minus total liabilities was at -Rp 39.4 trillion in the fourth quarter from-Rp 40.4 trillion in the third quarter & -Rp 42 trillion a year ago.
- With our forecast for higher free cashflow & a dividend payout of Rp 1.72 trillion...
- ...the net cash will be -Rp 36.1 trillion in 12 months time.
Profit
- Net profit was higher at Rp 1.13 trillion in the fourth quarter up from Rp 935 billion in the third quarter.
- The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was lower at 77%.
- We use the same 77% costs to predict a stronger next 12 months profit of Rp 5.74 trillion.
Value
- SMGR has raised Rp 2 trillion of capital in the last six years.
- At the current market value of Rp 62.3 trillion, it’s only 1.44X sales, 0.82X assets, 1.57X equity with a 14.5% profitability & a 2.8% yield.
- Our free cashflow forecast is Rp 4.6 trillion. At 1.6% with a 0.45X adjustment gives a revised higher target price of Rp21,982.
