## UNTR, shares to more than triple

Target price Rp71,209

Last 12-month cashflow +Rp 14.4 trillion

February 26th,, 2021

1 minute read

Sales

Cashflow

1 minute read

Sales

- Sales finally grew by 4% in the fourth quarter to Rp 13.8 trillion after a -11% decline in the third quarter.
- Sales were 5.7% below our forecast. Growth cane from coal mining +37.8%!
- Average quarterly growth is -7%. We predict average growth will turn positive 11% & sales will rise to Rp 21.1 trillion by the fourth quarter of 2021.

Cashflow

- Cashflow was a bit lower at Rp 3.1 trillion in the fourth quarter from Rp 4.5 trillion in the third quarter while investment spending stayed low.
- Average quarterly Cashflow is Rp 3.6 trillion.
- We use average investment spending Rp 0.7 trillion which with higher sales gives a flat Rp 3.6 trillion average quarterly free Cashflow in this next 12 months.

## Sales finally grow, strong cashflow on low investment, shares to more than triple ...

Balance sheet

Profit

Value

- The balance sheet net leverage, cash minus total liabilities was at -Rp 17 trillion in the fourth quarter from -Rp 21 trillion in the third quarter, -Rp 39 trillion a year ago.
- With our forecast for positive cashflow & assuming a dividend payout of Rp 3.1 trillion...
- ...the net cash will be at -Rp 5.6 trillion in 12 months time.

Profit

- Net profit was Rp 0.4 trillion in the fourth quarter from Rp 1.1 trillion in the third quarter on higher depreciation.
- The cash costs ratio of net profit add depreciation minus sales as a percent of sales was higher, 78% up from 75%.
- We use the same 78% costs to predict a higher next 12 months profit of Rp 6.1 trillion.

Value

- UNTR has paid out Rp 14 trillion of capital the last six years.
- At the current market value of Rp 86.9 trillion, it’s 6.2X capital paid, only 1.15X sales, 0.91X assets, 1.32X equity with a 9.3% profitability & a 3.5% yield.
- Our cashflow forecast is Rp 14.3 trillion. At 1.6% with a 0.5X adjustment, gives a higher target price Rp71,209.