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SSMS, an 18% higher target price
Current 1,180 Target 1,394 +18%
November 18th 2021
1 minute read
Sales climbed 8%
Costs were higher
Cashflow negative
Balance sheet, lower leverage
Valuation, an 18% higher target price
1 minute read
Sales climbed 8%
- Sales climbed 8% in the third quarter to 1,351 billion rupiah vs our 1,374 billion rupiah forecast.
- This brings the quarterly average to 10% growth.
- We predict average growth of 5% in the next 12 months to bring sales to 1,636 billion rupiah in the third quarter of 2022.
Costs were higher
- The cash cost ratio was higher at -79% in the third quarter giving a lower 334 billion rupiah net profit.
- The average Cashflow cost ratio is at -80% now.
- We use the latest -79% cost ratio to predict a 277 billion rupiah profit in the third quarter of 2022.
Cashflow negative
- Free cashflow was negative -6 billion rupiah in the third quarter with working capital & higher -205 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at 115 billion rupiah now.
- We assume lower -162 billion rupiah investment spending which with higher sales gives a 189 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, lower leverage
- Cash declined from 1,742 to 1,720 billion rupiah in the third quarter.
- Liabilities declined from 7,945 to 7,752 billion rupiah so net cash improved from -6,203 to -6,032 billion rupiah.
- With our forecast cashflow & a -102 billion rupiah equity payout net cash will be -5,469 billion rupiah in 12 months time.
Valuation, an 18% higher target price
- INDR capital from the last 23 quarters to -1,151 billion rupiah in the third quarter with a -42 billion rupiah liabilities payment & will be -487 billion rupiah in12 months time.
- At the current market value of 11,240 billion rupiah based on our forecasts it’s at 0.82 X assets with a 18 years payback & a 1% yield.
- Our cashflow forecast is 664 billion rupiah which means an 17 X valuation. A 20 X valuation gives an 18% higher target price of 1,394 rupiah.
