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TOTL, a 14% yield
🎯 🏗 📈 Rp1,675
Last 12-month cashflow -Rp 51BN
November 2nd, 2020
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Sales
After five consecutive quarters of negative growth, sales were up +4% from a year ago in the 3Q after -13% in the 2Q. At Rp 606BN, sales were also 11% above our forecast & jumped 28% from the 2Q. We forecast that the recovery will continue & sales will rise back to Rp 794BN by the 3Q of next year.
Cashflow
Cashflow was also higher in the 3Q at +Rp 21BN compared to Rp 16BN in the 2Q, although this was helped by gains from investments & was lower than our forecast Rp 35BN. Assuming no investment spending together with higher sales & operating cashflow, e price average quarterly free cashflow will be higher, Rp 57BN in this next 12 months.
After five consecutive quarters of negative growth, sales were up +4% from a year ago in the 3Q after -13% in the 2Q. At Rp 606BN, sales were also 11% above our forecast & jumped 28% from the 2Q. We forecast that the recovery will continue & sales will rise back to Rp 794BN by the 3Q of next year.
Cashflow
Cashflow was also higher in the 3Q at +Rp 21BN compared to Rp 16BN in the 2Q, although this was helped by gains from investments & was lower than our forecast Rp 35BN. Assuming no investment spending together with higher sales & operating cashflow, e price average quarterly free cashflow will be higher, Rp 57BN in this next 12 months.
Sales rebounding, cash flow too, double digit yield, only 1X capital paid, higher price...!
Balance sheet
The balance sheet has remained net cash the last five years because of the positive cashflow. Net cash has ranged from Rp 400BN to Rp 700BN & was at Rp 592BN in the 3Q. from Rp 525BN in the 2Q. With our cashflow forecast & a dividend of Rp 134BN, net cash will be Rp 686BN in 12 months time.
Profit
With higher sales, net profit jumped back from a loss in the 2Q& & was up +130% from a year ago to Rp 85BN. The cash cost ratio of net profit add back depreciation minus sales as a % of sales dropped to 87%. E use the average 93% To predict a flat next 12 month profit of Rp 168BN
Value
TOTL has paid out capital consistently, up to Rp 691BN as of the 3Q. That’s almost 3/4s of the current market value Rp 961BN. That’s 0.32X sales 0.32X assets, 0.88X equity with a profitability of 14.4%, yield of 14%! Our cable forecast is Rp 238BN. At 1.6% with a 0.4X adjustment this gives a much higher target price of Rp1,675.
The balance sheet has remained net cash the last five years because of the positive cashflow. Net cash has ranged from Rp 400BN to Rp 700BN & was at Rp 592BN in the 3Q. from Rp 525BN in the 2Q. With our cashflow forecast & a dividend of Rp 134BN, net cash will be Rp 686BN in 12 months time.
Profit
With higher sales, net profit jumped back from a loss in the 2Q& & was up +130% from a year ago to Rp 85BN. The cash cost ratio of net profit add back depreciation minus sales as a % of sales dropped to 87%. E use the average 93% To predict a flat next 12 month profit of Rp 168BN
Value
TOTL has paid out capital consistently, up to Rp 691BN as of the 3Q. That’s almost 3/4s of the current market value Rp 961BN. That’s 0.32X sales 0.32X assets, 0.88X equity with a profitability of 14.4%, yield of 14%! Our cable forecast is Rp 238BN. At 1.6% with a 0.4X adjustment this gives a much higher target price of Rp1,675.
