## UNTR, a 6.9% yield

Current, target price Rp22,475, 87,683 (+290%)

April 22nd , 2021

1 minute read

Sales, rebounding fast

Cashflow, very strong

1 minute read

Sales, rebounding fast

- Sales increased by 30% in the first quarter to 18 trillion rupiah, which is 12% above our forecast.
- This is after a 4% increase in the fourth quarter & brings the quarterly average growth to positive 1%.
- We predict strong average growth of 8% a quarter in this next 12 months which will bring sales to 24 trillion rupiah by the first quarter of 2022.

Cashflow, very strong

- Cashflow was a higher positive 5 trillion rupiah in the first quarter after positive 3 trillion rupiah in the fourth quarter.
- Average quarterly cashflow is now positive 4 trillion rupiah.
- We use the latest quarter investment spending of -1 trillion rupiah, which with higher sales, gives the same average quarterly cashflow of 4 trillion rupiah in this next 12 months.

## Sales recovering faster than expected, stable margins, strong cashflow, de leveraging towards net cash, a 6.9% yield, higher target price...

Balance sheet, de leveraging to net cash

Profit, stable margins

Value, a 6.9% yield

- With positive cashflow, the net leverage of cash minus total liabilities was -12 trillion rupiah in the first quarter from -17 billion rupiah in the fourth quarter & -31 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -6 trillion rupiah...
- ...net cash will be at almost zero in 12 months time.

Profit, stable margins

- Net profit was higher at 2 trillion rupiah in the first quarter from 0.4 trillion 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 stable at -78%.
- We use the same -78% costs, to predict a 2X higher next 12 months profit of 12 trillion rupiah.

Value, a 6.9% yield

- UNTR has paid out capital of 14 trillion rupiah in the last six years.
- At the current market value of 84.7 trillion rupiah, it’s at 6.05X capital paid, only 0.94X sales, 0.83X assets, 1.16X equity, with a 16.0% profitability & a 6.9% yield.
- Our free cashflow forecast is 17.6 trillion rupiah. At 1.6% with a 0.3X adjustment, gives a 290% higher target price of 87,683 rupiah.