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SMRA
SMRA, only 0.38x assets
🎯 🏠 📈 Rp1,165
Last 12 months cashflow -Rp3,748bn ⬆️
September 2nd, 2020
⏰ 1 minute read
⏰ 1 minute read
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Sales
Sales growth was -29% in the 2Q, the third quarter of negative growth in a row. But sales were 8% above our forecast & +10% from the 1Q as property development sales jumped +50%. In reality the sales have barely changed in 5 years at an average Rp1.3tn a quarter. We predict 3.7% growth the next 12 months to Rp5.65tn.
Cashflow
Cashflow was negative again in the 2Q, -Rp363bn excluding working capital. Cashflow has fallen back to negative again in the last 12 months as sales have declined. With our forecast for some sales growth & assuming investment spending slows down even lower than the first half, we predict the next 12 months average quarterly cashflow will turn positive again, Rp122bn.
Sales growth was -29% in the 2Q, the third quarter of negative growth in a row. But sales were 8% above our forecast & +10% from the 1Q as property development sales jumped +50%. In reality the sales have barely changed in 5 years at an average Rp1.3tn a quarter. We predict 3.7% growth the next 12 months to Rp5.65tn.
Cashflow
Cashflow was negative again in the 2Q, -Rp363bn excluding working capital. Cashflow has fallen back to negative again in the last 12 months as sales have declined. With our forecast for some sales growth & assuming investment spending slows down even lower than the first half, we predict the next 12 months average quarterly cashflow will turn positive again, Rp122bn.
Sales growth & lower investment ➡️ positive cashflow, cheap to assets, share price turnaround (note trading volume has surged) ...
Balance sheet
The balance sheet is in net debt because of previous spending, recently relentless negative working capital (9 out of the last 11 quarters), plus the negative cashflow now. As of the 2Q, the net debt has reached a new peak of Rp7.73tn. With our forecast for some positive cashflow & no dividend payment, the net debt will reduce to Rp7.24tn.
Profit
While sales declined by -29%, net profit dropped by -95% to only Rp6bn. That’s because the cash cost ratio of net profit add back depreciation minus sales S a % of sales increased from 89% to 93%. We use the last 18 months average which is 87% to predict the next 12 months profit will rise by +3.1% to Rp449bn.
Value
SMRA has been raising capital the last 5 years & the share price has followed. But we see a payout this next 12 months. At Rp9.3tn, it’s 1.65x sales, 0.38x the assets, 0.95x the equity with a 4.3% profitability, 0% yield. We keep our cashflow forecast at Rp489bn which at 1.6% & 0.5x adjustment gives a higher target price Rp1,165.
The balance sheet is in net debt because of previous spending, recently relentless negative working capital (9 out of the last 11 quarters), plus the negative cashflow now. As of the 2Q, the net debt has reached a new peak of Rp7.73tn. With our forecast for some positive cashflow & no dividend payment, the net debt will reduce to Rp7.24tn.
Profit
While sales declined by -29%, net profit dropped by -95% to only Rp6bn. That’s because the cash cost ratio of net profit add back depreciation minus sales S a % of sales increased from 89% to 93%. We use the last 18 months average which is 87% to predict the next 12 months profit will rise by +3.1% to Rp449bn.
Value
SMRA has been raising capital the last 5 years & the share price has followed. But we see a payout this next 12 months. At Rp9.3tn, it’s 1.65x sales, 0.38x the assets, 0.95x the equity with a 4.3% profitability, 0% yield. We keep our cashflow forecast at Rp489bn which at 1.6% & 0.5x adjustment gives a higher target price Rp1,165.
