## TKIM, stick with higher target price

Current, target price Rp11,000, 24,969 (+127%)

April 11th, 2021

1 minute read

Sales, up above forecast

Cashflow, lower

1 minute read

Sales, up above forecast

- Sales were up 8% in he fourth quarter to 216 million dollars which is 14% ahead of our forecast.
- After 9% growth in the third quarter, this brings the average quarterly growth to +2%.
- We predict faster average growth of 8% in this next 12 months which will bring sales to 291 million dollars by the fourth quarter of 2021.

Cashflow, lower

- Despite higher sales, cashflow was 30 million dollars in the fourth quarter from 106 million dollars in the third quarter.
- This brings the average quarterly Cashflow to 41 million dollars.
- We use the same investment spending of 4 million dollars which with higher sales gives a higher average quarterly cashflow of 60 million dollars in this next 12 months.

## Sales beat forecast, but lower margins & cashflow, flat leverage, stick with higher cashflow & higher target price....

Balance sheet, leverage flat

Profit , margins drop

Value, maintain higher price

- The balance sheet net leverage of cash minus total liabilities was flat at -1.4 billion dollars in the fourth quarter from -1.4 billion dollars in the third quarter & -1.5 billion dollars a year ago.
- With our forecast higher cashflow & assuming a dividend payout of 50 million dollars...
- ...the net cash will improve to -1.2 billion dollars in 12 months time.

Profit , margins drop

- The fourth quarter saw a loss of -20 million dollars after a third quarter profit of +78 million dollars.
- The cash cost ratio of net profit add depreciation minus sales as a percent of sales jumped to 99%.
- We use the avenge 76% costs to predict a higher next 12 months profit of 167 million dollars.

Value, maintain higher price

- TKIK has paid out 375 million dollars of capital in the last five years.
- At the current market value of 2.3 billion dollars, it’s 6.2X capital paid, 2.1X sales, 0.8X assets, 1.4X equity with a 10.3% profitability & a 2.2% yield.
- Our cashflow forecast is 240 million dollars. At 1.6% with a 0.35C adjustment, this gives a 127% higher target price of Rp24,969.