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TSPC, an upgraded target price
Current, target price Rp1,545, 3,848 (+149%)
May 10th, 2021
1 minute read
Sales, down from a record
Cashflow, lower
1 minute read
Sales, down from a record
- Sales decreased by -5% in the first quarter to 2,744 billion rupiah, which is -5% compared to our forecast.
- This is after a 5% increase in the fourth quarter & brings the quarterly average growth to 0%.
- We predict positive average growth of 3% a quarter in this next 12 months which will bring sales to 3,146 billion rupiah by the first quarter of 2022.
Cashflow, lower
- Cashflow was lower at 12 billion rupiah in the first quarter down from 287 billion rupiah in the fourth quarter on negative working capital.
- Average quarterly cashflow is now at 130 billion rupiah.
- We use flat investment spending of -149 billion rupiah, which with higher sales, gives an average quarterly cashflow of 122 billion rupiah in this next 12 months.
Sales down from the record, but higher margins, lower cashflow, but average cashflow is strong, leverage trend is improving, expecting a large payout with a 5% yield, upgraded target price...
Balance sheet, trend of lower leverage
Profit, stronger margins
Value, a 5% yield
- The net leverage of cash minus total liabilities was at -350 billion rupiah in the first quarter from -82 billion rupiah in the fourth quarter & -404 billion rupiah a year ago.
- With our forecast cashflow & assuming a dividend payout of -349 billion rupiah...
- ...net cash will improve to -144 billion rupiah in 12 months time.
Profit, stronger margins
- Net profit was higher at 312 billion rupiah in the first quarter from 300 billion rupiah in the fourth quarter.
- The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was down to -86%.
- We use the same -86% costs, to predict a higher next 12 months profit of 871 billion rupiah.
Value, a 5% yield
- TSPC cumulative net capital is at +443 billion rupiah from the last five years.
- At the current market value of 6,953 billion rupiah, based on forecasts it’s 6.97X capital paid, only 0.59X sales, 0.69X assets, 0.96X equity, with a 12.1% profitability & a 5.0% yield.
- Our free cashflow forecast is 554 billion rupiah. At 1.6% with a 0.5X adjustment, gives a 149% higher target price of 3,848 rupiah.
