## WSKT, positive cashflow from asset sales

Current, target price Rp1,355, 1,436 (+8%)

Last, next 12-months cashflow -Rp 2.94, -1.8 trillion

March 26th, 2021

1 minute read

Sales

Cashflow

1 minute read

Sales

- Sales finally jumped 20% in the fourth quarter to Rp4.45 trillion which is 14% below our forecast.
- This is after a decline of -4% in the third quarter, bringing the average quarterly growth to -12%.
- We expect growth to turn positive 18% a quarter in this next 12 months, sales to recover to Rp 8.45 trillion by fourth quarter 2021.

Cashflow

- Cashflow turned positive +Rp 3.6 trillion in the fourth quarter from -Rp 3 trillion in the third quarter on investment (asset sale) gains, & a reversal of interest expense.
- Average quarterly Cashflow is -Rp 735 billion.
- We use investment spending Rp 494 billion a quarter, which with higher sales gives a better average quarterly free Cashflow of -Rp 451 billion.

## Sales rebound a bit, positive cashflow on asset sales, cheap, slightly higher target price...

Balance sheet

Profit

Value

- With the return to positive cashflow, the net leverage of cash minus total liabilities was -Rp 87.8 trillion in the fourth quarter from -Rp 90.7 trillion in the third quarter, -Rp 84.3 trillion a year ago.
- With less negative cashflow & assuming no dividend payout...
- ...the net cash will be slightly worse at -Rp 89.6 trillion in 12 months time.

Profit

- The fourth quarter net loss was lower at -Rp 3.47 trillion from -Rp 4.7 trillion in the third quarter.
- The cash cost ratio of net profit add depreciation minus sales as a percent of sales was better at 173%...
- We use 99% costs as sales rise to predict a lesser loss of -Rp 685 billion in this next 12 months.

Value

- WSKT has raised a total Rp 78.3 trillion of capital in the last six years..
- At the current market value of Rp 18.4 trillion, it’s at 0.71X sales, only 0.17X assets, 1.16X equity with no profitability or yield yet.
- Our sales forecast is Rp 26 trillion. At a 1X sales valuation this gives a slightly higher target price of Rp1,437.