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CARE, a -55% lower target price
Current 515 Target 230 -55%
December 30th 2021
1 minute read
Sales grew 19%
Costs up 2 points, profit down
Cashflow negative on high investment
Balance sheet lower net cash
Valuation, expensive, a -55% lower target price
1 minute read
Sales grew 19%
- Sales grew 19% in the third quarter to 87 billion rupiah which is +57% higher than a year ago,
- This brings the quarterly average to 16% growth.
- We predict average growth of 6% in this next 12 months to bring sales to 107 billion rupiah in the third quarter of 2022.
Costs up 2 points, profit down
- The cash cost ratio went up 2 points from -88% to -90% profit declined from 5 to 4 billion rupiah in the third quarter.
- The average cost ratio is at -89% now.
- We use a lower -87% cost ratio as sales rise to predict a 9 billion rupiah profit in the third quarter of 2022.
Cashflow negative on high investment
- Free cashflow went from 85 to -97 billion rupiah in the third quarter with much higher -116 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at -4 billion rupiah now.
- We assume lower -11 billion rupiah investment spending which with higher sales gives a 3 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet lower net cash
- Cash declined 615 to 544 billion rupiah in the third quarter.
- Liabilities increased 166 to 270 billion rupiah so net cash worsened 449 to 274 billion rupiah.
- With our forecast cashflow & a -10 billion rupiah equity payout 2 billion rupiah liabilities payment net cash will be 272 billion rupiah in 12 months time.
Valuation, expensive, a -55% lower target price
- CARE capital from the last 19 quarters worsened -1,995 to -2,021 billion rupiah in the third quarter with 27 billion rupiah new liabilities & will be -2,014 billion rupiah in12 months time.
- At the current market value of 17,120 billion rupiah based on our forecasts it’s at 4.8 X assets with a 0% yield.
- Our operating cashflow forecast is 51 billion rupiah which means an 336 X valuation. A 150 X valuation gives a -55% lower target price of 230 rupiah.