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ISSP, a 52% higher target price
Current 476 Target 725 +52%
November 14th 2021
1 minute read
Sales jumped 45%
Costs higher
Cashflow negative again
Balance sheet, higher leverage
Valuation, a 52% higher target price
1 minute read
Sales jumped 45%
- Sales jumped 45% in the third quarter to 1,624 billion rupiah vs our 1,291 billion rupiah forecast.
- This brings the quarterly average to 13% growth.
- We predict average growth of 2% in this next 12 months to bring sales to 1,720 billion rupiah in the third quarter of 2022.
Costs higher
- The cash cost ratio was at -86% in the third quarter giving a new high 191 billion rupiah net profit.
- The Cashflow cost ratio is at -90% now.
- We use -86% cost ratio to predict a 201 billion rupiah profit in the third quarter of 2022.
Cashflow negative again
- Free cashflow was negative again -260 billion rupiah in the third quarter with -29 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at 107 billion rupiah now.
- We assume the same -29 billion rupiah investment spending which with higher sales gives a 206 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, higher leverage
- Cash increased from 37 to 54 billion rupiah in the third quarter.
- Liabilities increased from 2,705 to 3,085 billion rupiah so net cash worsened from -2,668 to -3,031 billion rupiah.
- With our forecast cashflow & a -225 billion rupiah equity payout net cash will be -2,485 billion rupiah in 12 months time.
Valuation, a 52% higher target price
- ISSP capital from the last 15 quarters declined to 246 billion rupiah in the third quarter but will be 1,017 billion rupiah in12 months time.
- At the current market value of 3,363 billion rupiah based on our forecasts it’s at 0.49 X assets with a 9 years payback & a 7% yield.
- Our cashflow forecast is 731 billion rupiah which means an 5 X valuation. A 7 X valuation gives a 52% higher target price of 725 rupiah.