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HMSP sharp with an 9% yield forecast

HMSP Current 960 Target 1,581 + 65%

28 Jul 2022
1 minute read

Sales grew 5%
Last 5 quarters
24,070 24,891 26,356 26,161 27,345

• Sales grew 5% in the second quarter to 27,345 billion rupiah 2% above our 26,883 billion rupiah forecast.
• This brings the average to 3% growth.
• We predict average growth of 3% in this next 12 months to bring sales to 30,156 billion rupiah in the second quarter “2023.

Costs up profit down
Last 5 quarters
-92% -93% -93% -92% -95%

• The cash cost ratio went from -92% to -95% profit from 1,915 to 1,133 billion rupiah in the second quarter
• The average cost ratio is at -93% now.
• We use a lower -92% cost ratio to predict a 2,245 billion rupiah profit in the second quarter “2023.

Cashflow higher
Last 5 quarters billion rupiah
8,253 6,379 -2,440 -576 -447

• Free cashflow went from -576 to -447 billion rupiah in the second quarter with -143 billion rupiah investment cashflow.
• Average quarterly Cashflow is at 729 billion rupiah, 3% of market cap.
• We assume lower -93 billion rupiah investment spending which with higher sales gives 2,298 billion rupiah average Cashflow in the next 12 months.

Balance sheet net cash improved
Last 5 quarters billion rupiah
-3,116 -898 -6,055 -11,492 -8,052

• Cash declined 17,218 to 9,615 billion rupiah in the 0 quarter
• Liabilities declined 28,710 to 17,667 billion rupiah so net cash improved -11,492 to -8,052 billion rupiah
• With our forecast cashflow & a -10,576 billion rupiah equity payout 1,383 billion rupiah liabilities payment net cash will be -9,180 billion rupiah in 12 months time.

Last 12 months capital + 6% of market cap.
Last 5 quarters billion rupiah
66,330 66,330 66,251 66,302 73,458

• HMSP 30 quarter capital improved 66,302 to 73,458 billion rupiah in the second quarter with -208 billion rupiah from liabilities + 7,363 billion rupiah from equity & will be 82,651 billion rupiah in12 months time.
• At the current market value of 111,665 billion rupiah based on our forecasts it’s at 2.68 X assets with a 4 years payback & a 9% yield.
• Our cashflow forecast is 9,193 billion rupiah which means a 12 X valuation. A 20 X valuation gives a 65% higher target price 1,581 rupiah.