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DGNS, sales growth slows, a -57% lower target price
Current 745 Target 323 -57%
December 31st 2021
1 minute read
Sales growth slowed to only 1%
Costs up 8 points, profit down
Cashflow less negative
Balance sheet net cash turns negative
Valuation, a -57% lower target price
1 minute read
Sales growth slowed to only 1%
- Sales growth slowed to only 1% in the third quarter, 82 billion rupiah which is 45% higher than a year ago.
- This brings the quarterly average to 12% growth.
- We predict average growth of 0% in this next 12 months to bring sales to 83 billion rupiah in the third quarter of 2022.
Costs up 8 points, profit down
- The cash cost ratio went up 8 points from -68% to -76% profit from 24 to 18 billion rupiah in the third quarter.
- The average Cashflow cost ratio is much higher at -97% now.
- We use a median -87% cost ratio to predict a 9 billion rupiah profit in the third quarter of 2022.
Cashflow less negative
- Free cashflow was less negative from -16 to -13 billion rupiah in the third quarter with -12 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at -10 billion rupiah now.
- We assume lower -7 billion rupiah investment spending which with higher sales gives a positive 4 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet net cash turns negative
- Cash declined 53 to 37 billion rupiah in the third quarter.
- Liabilities increased 34 to 45 billion rupiah so net cash turned negative 19 to -8 billion rupiah.
- With our forecast cashflow & a -11 billion rupiah equity payout -5 billion rupiah liabilities payment net cash will be -3 billion rupiah in 12 months time.
Valuation, a -57% lower target price
- DGNS capital from the last 19 quarters improved -74 to -69 billion rupiah in the third quarter with 1 billion rupiah new liabilities, a -6 billion rupiah equity payout & will be -53 billion rupiah in12 months time.
- At the current market value of 931 billion rupiah based on our forecasts it’s at 3.5 X assets with a 13 years payback & a 1% yield.
- Our operating cashflow forecast is 16 billion rupiah which means an 58 X valuation. A 25 X valuation gives a -57% lower target price of 323 rupiah.