## TOWR, turned capital payer again

Current, target price Rp1,175, 1,994 (+70%)

- Sales accelerate again,
- strong margins,
- average cashflow rising,
- no de leverage yet,
- a capital payer again,
- higher target price

June 1st , 2021

1 minute read

Sales, higher again

Cashflow, average rising

1 minute read

Sales, higher again

- Sales increased by 8% in the first quarter to 1,957 billion rupiah, which is +3% compared to our forecast.
- This is after a 5% increase in the fourth quarter & brings the quarterly average growth to 12%.
- We predict average growth of 4% a quarter in this next 12 months which will bring sales to 2,265 billion rupiah by the first quarter of 2022.

Cashflow, average rising

- Cashflow was 685 billion rupiah in the first quarter after 806 billion rupiah in the fourth quarter.
- Average quarterly cashflow is now at 641 billion rupiah.
- We use flat investment spending of -325 billion rupiah, which with higher sales, gives a higher average quarterly cashflow of 996 billion rupiah in this next 12 months.

Balance sheet, still high leverage

Profit, strong margins

Value, turned capital payer again

- The net leverage of cash minus total liabilities was -24,538 billion rupiah in the first quarter from -22,622 billion rupiah in the fourth quarter & -22,275 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -183 billion rupiah...
- ...net leverage will be -20,738 billion rupiah in 12 months time.

Profit, strong margins

- Net profit was lower at 795 billion rupiah in the first quarter from 926 billion rupiah in the fourth quarter, as....
- ... the cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was up to -39%.
- We use the same -39% costs, to predict a higher next 12 months profit of 3,664 billion rupiah.

Value, turned capital payer again

- TOWR cumulative net capital has turned positive +525 billion rupiah from the last six years.
- At the current market value of 58,680 billion rupiah, based on forecasts it’s 13.01X capital paid, 6.81X sales, 0.73X assets, 4.08X equity, with a 25.3% profitability & a 0.3% yield.
- Our free cashflow forecast is 3,983 billion rupiah. At 1.6% with a 0.4X adjustment, gives a 70% higher target price of 1,994 rupiah.