WIL, strong sales growth
Target price Rp5,611
Last 12-month cashflow +Rp 964 billion
February 24th,, 2021
1 minute read
1 minute read
- Sales jumped +23% in the second half to USD 27.9 billion after 1% growth in the first half. Sales were far, 17% ahead of our forecast.
- The average growth in the last 12 months is 12%.
- We expect average semester growth of 5% in this next 12 months & sass to reach USD 30.7 billion by the second semester 2021.
- Cashflow was negative -USD 2.6 billion in the second semester from working capital after +USD 1.3 billion in the first.
- Average cashflow is therefore -USD 627 million. Investment spending was also high at USD 1 billion.
- We use USD 904 million in our forecast which with higher sales gives an average semester cashflow USD 659 million this next 12 months.
Strong sales growth, but negative cashflow... expecting positive cashflow again & a higher share price...
- Despite negative cashflow the net cash minus total liabilities was better at -USD 26.9 billion in the second semester from -USD 27.5 billion in the first semester & -USD 27.1 billion a year ago.
- With our forecast positive cashflow & assuming a dividend payout of USD 599 million...
- ...the net cash will be -USD 26.2 billion in 12 months time.
- Net profit was USD 924 million in the second semester up from USD 611 million in the first semester.
- The cash cost ratio of net profit add non cash costs minus sales as a percent of sales was stable at 95%.
- We use the same 95% costs to predict the next 12 months profit will rise to USD 1.997 billion.
- WIL has still raised capital of USD 825 million in the last six years.
- At the current market value of USD 26 billion, it’s only 0.44X sales, 0.5X assets, 1.14X equity with an 8.8% profitability & a 1.7% yield.
- Our free cashflow forecast is USD 1.3 billion. At 1.6% with a 0.5X adjustment gives a higher target price of SGD6.8.