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ARTO looking dull at 105X Cashflow

ARTO Current 11,650 Target 8,341 -28%

May 2, 2022
1 minute read

Sales grew 29%
Last 5 quarters
49% 129% 61% 33% 29%

• Sales grew 29% in the first quarter to 347 billion rupiah -3% below our 359 billion rupiah forecast.
• This brings the quarterly average to 63% growth.
• We predict average growth of 18% in this next 12 months to bring sales to 667 billion rupiah in the first quarter of 2023.

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Costs up profit down
Last 5 quarters
-135% -87% -77% -33% -71%

• The cash cost ratio went from -33% to -71% profit from 119 to 19 billion rupiah in the first quarter.
• The average cost ratio is at -83% now.
• We use -67% cost ratio to predict a 307 billion rupiah profit in the first quarter of 2023.

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Cashflow lower
Last 5 quarters
-21, -114, -75, 209, 72

• Free cashflow went from 209 to 72 billion rupiah in the first quarter with -2 billion rupiah investment spending.
• Average quarterly Cashflow is at 23 billion rupiah now.
• We assume the same -2 billion rupiah investment spending which with higher sales gives a 385 billion rupiah Cashflow in the first quarter of 2023.

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Balance sheet higher leverage
Last 5 quarters
6,194 1,032 -367 -2,535 -2,690

• Non cash assets growth declined 28% to 2% in the first quarter. Average growth is 78% now.
• Liabilities growth declined 81% to 78% in the first quarter. Average growth is 79% now.
• The sales to asset ratio improved 2.5% to 3.1% in the first quarter. Average sales to assets is 2.4% now.

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Capita raised flat , a -28% lower target price
Last 5 quarters
-8,369 -8,352 -8,352 -8,352 -8,352

• ARTO 13 quarters capital raised was flat at -8,352 rupiah in the first quarter. but will be -8,141 in the in12 months time.
  
• At the current market value of 161,425 billion rupiah based on our forecasts it’s at 12 X assets with a 0% yield.
  
• Our cashflow forecast is 1,541 billion rupiah which means a 105 X valuation. A 75 X valuation gives a -28% lower target price 8,341 rupiah.
  

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