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TLKM, a 69% higher target price
Current 3,800 Target 6,431 +69%
November 24th 2021
1 minute read
Sales grew 3%
Cost ratio up 1 point
Cashflow higher
Balance sheet, lower leverage
Valuation, a 69% higher target price
1 minute read
Sales grew 3%
- Sales grew 3% in the third quarter to 36,563 billion rupiah vs our 35,535 billion rupiah forecast.
- This brings the quarterly average to 3% growth.
- We predict average growth of 2% to bring sales to 39,554 billion rupiah in the third quarter of 2022.
Cost ratio up 1 point
- The cash cost ratio was 1 point higher at -56% in the third quarter giving a 8,743 billion rupiah net profit.
- The average Cashflow cost ratio is at -51% now.
- We use the latest -56% cost ratio to predict a 10,070 billion rupiah profit in the third quarter of 2022.
Cashflow higher
- Free cashflow was higher at 9,303 billion rupiah in the third quarter with -6,751 billion rupiah investment spending.
- Average quarterly Cashflow is at 8,351 billion rupiah now.
- We assume the same -6,751 billion rupiah investment spending which with higher sales gives a 9,437 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, lower leverage
- Cash declined from 36,613 to 17,491 billion rupiah in the third quarter.
- Liabilities declined from 153,870 to 127,687 billion rupiah so net cash improved from -117,257 to -110,196 billion rupiah.
- With our forecast cashflow & a -11,377 billion rupiah equity payout net cash will be -80,715 billion rupiah in 12 months time.
Valuation, a 69% higher target price
- TLKM capital from the last 27 quarters jumped to 128,062 billion rupiah in the third quarter with a -27,402 billion rupiah liabilities payment & will be 157,654 billion rupiah in12 months time.
- At the current market value of 376,400 billion rupiah based on our forecasts it’s at 1.51 X assets with a 6 years payback & a 3% yield.
- Our cashflow forecast is 35,389 billion rupiah which means an 11 X valuation. An18 X valuation gives a 69% higher target price of 6,431 rupiah.
