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DNET, a -34% lower target price
Current 3,210 Target 2,109 -34%
December 7th 2021
1 minute read
Sales grew another 15%
Costs 5 points higher, profit drops
Cashflow positive on investment gains, expected negative
Balance sheet, lower leverage
Valuation, a 34% lower target price
1 minute read
Sales grew another 15%
- Sales grew another 15% in the third quarter to 212 billion rupiah vs our 192 billion rupiah forecast.
- This brings the quarterly average to 21% growth.
- We predict average growth of 7% in this next 12 months to bring sales to 271 billion rupiah in the third quarter of 2022.
Costs 5 points higher, profit drops
- The cash cost ratio was 5 points higher at -43% in the third quarter giving a lower 134 billion rupiah net profit.
- The average Cashflow cost ratio is still above 100% at -112% now.
- We use a -99% cost ratio to predict a 15 billion rupiah profit in the third quarter of 2022.
Cashflow positive on investment gains, expected negative
- Free cashflow was positive 97 billion rupiah in the third quarter thanks to a positive 119 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at -83 billion rupiah now.
- We assume -28 billion rupiah investment spending which with higher sales gives a -26 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, lower leverage
- Cash increased from 287 to 328 billion rupiah in the third quarter.
- Liabilities declined from 6,862 to 6,773 billion rupiah so net cash improved from -6,575 to -6,445 billion rupiah.
- With our forecast cashflow & a -18 billion rupiah equity payout net cash will be -6,568 billion rupiah in 12 months time.
Valuation, a 34% lower target price
- DNET capital from the last 23 quarters improved to -6,782 billion rupiah in the third quarter with a -130 billion rupiah liabilities payment & 75 billion rupiah new equity & will be -6,887 billion rupiah in12 months time.
- At the current market value of 45,531 billion rupiah based on our forecasts it’s at 2.6 X assets with a years payback & a 0% yield.
- Our 12 month sales forecast is 997 billion rupiah which means an 46 X valuation. A 30 X valuation gives a -34% lower target price of 2,109 rupiah.