## WSBP, sales jump back

Current, target price Rp200, 423 (+112%)

April 7th, 2021

1 minute read

Sales, jump back

Cashflow, positive

1 minute read

Sales, jump back

- Sales surged 131% in the fourth quarter to Rp 775 billion which is 5% ahead of our forecast.
- This is after a drop of -3% in the third quarter bringing the average quarterly growth to +3%.
- We predict faster quarterly growth of 19% in the next 12 months bringing sales back to Rp 1.5 trillion by the fourth quarter 2021.

Cashflow, positive

- Cashflow was positive at +Rp 292 billion in the fourth quarter from -Rp 8 billion in the third quarter.
- The quarterly average free cash flow is now +Rp 100 billion.
- We assume the same low investment spending Rp 39 billion which with higher sales gives a higher average quarterly free Cashflow of Rp 138 billion in this next 12 months.

## Sales jump back, cashflow positive, expecting more normal margins & de leverage, only 0.23X assets, higher target price...

Balance sheet, but higher leverage

Profit, margins to recover

Value, higher target

- Despite the cash flow, the net leverage of cash minus total liabilities was at -Rp 9.16 trillion in the fourth quarter from -Rp 8.3 trillion in the third quarter & -Rp 7.6 trillion a year ago.
- With our forecast higher cashflow & assuming there’s no dividend payout...
- ...the net cash will improve to -Rp 8,6 trillion in 12 months time.

Profit, margins to recover

- The fourth quarter net loss was -Rp 3.6 trillion up from -Rp 1.15 trillion in the third quarter!
- The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was a whopping 485%!
- As sales recover we use normal 83% costs to predict a lower next 12 months net loss - Rp 617 billion.

Value, higher target

- WSBP has raised Rp 7.8 trillion of capital in the last six years.
- At the current market value of Rp 4.9 trillion it’s at 1.2X sales, only 0.23X assets, 9X equity with no profitability and no yield as yet.
- Our cashflow forecast is Rp 554 billion. At 1.6% with a 0.3X adjustment this gives a +112% higher price of Rp423.