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WOOD, winner of 2020 so far
🎯 🪑 📈 Rp1.065
Last 12-month cashflow +Rp 185 billion ⬆️
November 20th, 2020
⏰ 1 minute read
⏰ 1 minute read
Sales
This is one of the winners of 2020 & has the fastest growth from a year ago of all the stocks we cover, +74%. Sales were +15% in the third quarter from the second & at Rp 751 billion, were 10% ahead of our forecast. We predict sales will growth +20.8% in this next 12 months to Rp 2.96 billion.
Cashflow
Cashflow was stronger again in the third quarter at Rp 125 billion excluding working capital, despite some higher investment spending. The average quarterly cashflow this year is at Rp 61 billion. We use this year’s average investment spending & this together with higher sales, gives an average quarterly free cashflow forecast of Rp 67 billion for this next 12 months.
This is one of the winners of 2020 & has the fastest growth from a year ago of all the stocks we cover, +74%. Sales were +15% in the third quarter from the second & at Rp 751 billion, were 10% ahead of our forecast. We predict sales will growth +20.8% in this next 12 months to Rp 2.96 billion.
Cashflow
Cashflow was stronger again in the third quarter at Rp 125 billion excluding working capital, despite some higher investment spending. The average quarterly cashflow this year is at Rp 61 billion. We use this year’s average investment spending & this together with higher sales, gives an average quarterly free cashflow forecast of Rp 67 billion for this next 12 months.
Number 1 sales growth, strong cashflow but working capital negative, neutral working capital will allow debt pay down & higher shares ...
Balance sheet
Despite the positive cashflow, the balance sheet debt was only slightly lower in the third quarter at Rp 2.24 trillion as working capital was negative again. All the debt is from negative working capital. With our forecast for higher positive cashflow & a small dividend payment Rp 28 billion, net debt will be Rp 2 trillion in 12 months time.
Profit
Net profit jumped more than sales, +35.7% from the second quarter to Rp 76 billion. The cash cost ratio of net profit add depreciation minus sales as a % of sales was lower at 87%. We use the same 87% costs to predict profit rises +32% this next 12 months to Rp 276 billion, almost the same as the cashflow.
Value
WOOD has raised Rp 1.75 trillion of capital in the last three years & can now start to pay back. At Rp 3.63 trillion, it’s 1.22X sales, 0.64X assets, 1.15X equity with an 8.7% profitability & a 0.8% yield. Our cashflow forecast is now Rp 269 billion. At 1.6% with a 0.4X adjustment gives a higher target price of Rp1,065.
Despite the positive cashflow, the balance sheet debt was only slightly lower in the third quarter at Rp 2.24 trillion as working capital was negative again. All the debt is from negative working capital. With our forecast for higher positive cashflow & a small dividend payment Rp 28 billion, net debt will be Rp 2 trillion in 12 months time.
Profit
Net profit jumped more than sales, +35.7% from the second quarter to Rp 76 billion. The cash cost ratio of net profit add depreciation minus sales as a % of sales was lower at 87%. We use the same 87% costs to predict profit rises +32% this next 12 months to Rp 276 billion, almost the same as the cashflow.
Value
WOOD has raised Rp 1.75 trillion of capital in the last three years & can now start to pay back. At Rp 3.63 trillion, it’s 1.22X sales, 0.64X assets, 1.15X equity with an 8.7% profitability & a 0.8% yield. Our cashflow forecast is now Rp 269 billion. At 1.6% with a 0.4X adjustment gives a higher target price of Rp1,065.
