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WOOD, cashflow has turned positive
Current, target price Rp790, 1,875 (+137%)
May 8th , 2021
1 minute read
Sales, seasonally lower but still strong
Cashflow, positive & average positive
1 minute read
Sales, seasonally lower but still strong
- Sales declined seasonally by -16% in the first quarter to 912 billion rupiah, which is +39% compared to our forecast.
- This is after a 44% increase in the fourth quarter & brings the quarterly average growth to 20%.
- We predict a more moderate average growth of 6% a quarter in this next 12 months which will bring sales to 1,088 billion rupiah by the first quarter of 2022.
Cashflow, positive & average positive
- Cashflow was positive 32 billion rupiah in the first quarter after negative -70 billion rupiah in the fourth quarter helped by investment gains.
- Average quarterly cashflow which turned positive in the fourth quarter is now positive 8 billion rupiah.
- We use investment spending of -26 billion rupiah, which with higher sales, gives a higher average quarterly cashflow of 118 billion rupiah in this next 12 months.
Sales seasonally lower but still strong, margins stable, avenged cashflow has now turned positive for two quarters, only 0.39X assets, higher target price...
Balance sheet, expecting lower leverage
Profit, steady margins
Value, at 0.39X assets
- The net leverage of cash minus total liabilities was -2,878 billion rupiah in the first quarter from -2,877 billion rupiah in the fourth quarter & -2,881 billion rupiah a year ago.
- With our forecast higher cashflow & assuming a dividend payout of -49 billion rupiah...
- ...net cash will improve to -2,454 billion rupiah in 12 months time.
Profit, steady margins
- Net profit was down at 102 billion rupiah in the first quarter from 125 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 steady at -86%.
- We use the same -86% costs, to predict a higher next 12 months profit of 485 billion rupiah.
Value, at 0.39X assets
- WOOD cumulative net capital is at -1,604 billion rupiah from the last four years.
- At the current market value of 4,982 billion rupiah, based on forecasts it’s 1.18X sales, only 0.39X assets, 1.40 equity, with a 13.6% profitability & a 1.0% yield.
- Our free cashflow forecast is 473 billion rupiah. At 1.6% with a 0.4X adjustment, gives a 137% higher target price of 1,875 rupiah.
