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SMRA, a 10% higher target price
Current 855 Target 942 10%
December 4th 2021
1 minute read
Sales declined -4%
Costs 3 points higher, profit lower
Cashflow lower
Balance sheet, lower leverage
Valuation, a 10% higher target price
1 minute read
Sales declined -4%
- Sales declined -4% in the third quarter to 1,331 billion rupiah vs our 1,360 billion rupiah forecast.
- This brings the quarterly average to 13% growth.
- We predict average growth of 6% in this next 12 months to bring sales to 1,637 billion rupiah in the third quarter of 2022.
Costs 3 points higher, profit lower
- The cash cost ratio was 3 points higher at -89% in the third quarter giving a 119 to 79 billion rupiah lower net profit.
- The average Cashflow cost ratio is at -73% now.
- We use lower -81% cost ratio to predict a 241 billion rupiah profit in the third quarter of 2022.
Cashflow lower
- Free cashflow was lower at 274 billion rupiah in the third quarter with lower cash receipts & -111 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at 307 billion rupiah now.
- We assume the same -111 billion rupiah investment spending which with higher sales gives a 194 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, lower leverage
- Cash declined from 2,842 to 2,086 billion rupiah in the third quarter.
- Liabilities declined from 17,400 to 14,800 billion rupiah so net cash improved from -14,558 to -12,714 billion rupiah.
- With our forecast cashflow & a 0 billion rupiah equity payout net cash will be -12,035 billion rupiah in 12 months time.
Valuation, a 10% higher target price
- SMRA capital from the last 27 quarters improved to -2,399 billion rupiah in the third quarter with a -964 billion rupiah liabilities payment & a -67 billion rupiah equity payout & will be -1,720 billion rupiah in12 months time.
- At the current market value of 12,330 billion rupiah based on our forecasts it’s at 0.48 X assets with a 34 years payback & a 0% yield.
- Our 12 month cashflow forecast is 679 billion rupiah which means an 18 X valuation. A 20 X valuation gives a 10% higher target price of 942 rupiah.
