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TINS
Timah, Cashflow positive again (finally)
🎯⚒➡️📈 Rp922
12 month (real) free cash flow -Rp3,436bn ⬆️
August 1st, 2020
⏰ 1 minute read
⏰ 1 minute read
Watch the 3 minute explainer using the data file & model ⬇️
Sales
A few quarters ago, TINS sales growth was over 100% that’s slowed down dramatically to +5% in 1Q and -34% in 2Q. That’s actually a good thing because TINS sales have been losing money. We expect the sales to be lower this year before starting to rise again in 2021. Our forecast is for 12 month sales growth -19%, Rp14.3bn.
Cashflow
Sales growth resulted in negative cashflow, one of the most negative of the companies we cover. Most of the negative has been working capital, but that turned around and now in 2Q cashflow is positive again excluding working capital. We think cashflow in the next 12 months will be positive, Rp222bn with only a small help from the working capital.
A few quarters ago, TINS sales growth was over 100% that’s slowed down dramatically to +5% in 1Q and -34% in 2Q. That’s actually a good thing because TINS sales have been losing money. We expect the sales to be lower this year before starting to rise again in 2021. Our forecast is for 12 month sales growth -19%, Rp14.3bn.
Cashflow
Sales growth resulted in negative cashflow, one of the most negative of the companies we cover. Most of the negative has been working capital, but that turned around and now in 2Q cashflow is positive again excluding working capital. We think cashflow in the next 12 months will be positive, Rp222bn with only a small help from the working capital.
Sales slowdown allows cashflow positive, lower debt shares back above average + NEW FEATURE net capital paid to check against share price ⬇️
Balance sheet
The negative cashflow has resulted in a huge increase in debt. Debt 2017 to 2019 increased about Rp9tn. Now as cashflow turns positive net debt is reducing and was Rp7.8tn in 2Q from Rp9.9tn end 2019. With our forecast positive cashflow and assuming there is no dividend payment, the net debt will be lower at Rp7.7tn in 12 months time.
Profit
Despite the decline in sales the net profit has finally turned positive a game in the 2Q has the cash cost ratio, net profit and depreciation minus Sales as a percent of sales, is back below 100% at 94%. We use 93% to forecast a return to net profit in the next 12 months of Rp202bn, vs a loss previously.
Value
TINS current market value is Rp5.66tn. That’s 0.4 X our 12 month sales forecast, 0.3 1X the total assets and 1.1 3X the equity with the profitability of 4%. Yield is 0%. We use our 1.6% cash flow valuation with a 50% discount because of the high debt. This gives a higher target price, back above the moving average, Rp932.
The negative cashflow has resulted in a huge increase in debt. Debt 2017 to 2019 increased about Rp9tn. Now as cashflow turns positive net debt is reducing and was Rp7.8tn in 2Q from Rp9.9tn end 2019. With our forecast positive cashflow and assuming there is no dividend payment, the net debt will be lower at Rp7.7tn in 12 months time.
Profit
Despite the decline in sales the net profit has finally turned positive a game in the 2Q has the cash cost ratio, net profit and depreciation minus Sales as a percent of sales, is back below 100% at 94%. We use 93% to forecast a return to net profit in the next 12 months of Rp202bn, vs a loss previously.
Value
TINS current market value is Rp5.66tn. That’s 0.4 X our 12 month sales forecast, 0.3 1X the total assets and 1.1 3X the equity with the profitability of 4%. Yield is 0%. We use our 1.6% cash flow valuation with a 50% discount because of the high debt. This gives a higher target price, back above the moving average, Rp932.
