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JAWA, a -24% lower target price
Current 168 Target 128 -24%
November 12th 2021
1 minute read
Sales declined-32%
Costs back above 100%
Cashflow to turn positive
Balance sheet, low cash
Valuation, a -24% lower target price
1 minute read
Sales declined-32%
- Sales declined -32% in the third quarter to 170 billion rupiah vs our 263 billion rupiah forecast.
- This brings the quarterly average to 26% growth.
- We predict average growth of 9% in this next 12 months to bring sales to 239 billion rupiah in the third quarter of 2022.
Costs back above 100%
- The cash cost ratio was back above 100% at -119% in the third quarter giving a -63 billion rupiah net profit.
- The Cashflow cost ratio is even higher at -126% now.
- We use -93% cost ratio as sales recover to predict a -13 billion rupiah profit in the third quarter of 2022.
Cashflow to turn positive
- Free cashflow was a more negative -55 billion rupiah in the third quarter with low -7 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at -65 billion rupiah now.
- We assume the same -7 billion rupiah investment spending which with higher sales gives a positive 10 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, low cash
- Cash declined from 20 to 9 billion rupiah in the third quarter.
- Liabilities increased from 3,333 to 3,341 billion rupiah so net cash worsened from -3,313 to -3,332 billion rupiah
- With our forecast cashflow & a 0 billion rupiah equity payout net cash will be -3,380 billion rupiah in 12 months time.
Valuation, a -24% lower target price
- JAWA capital from the last 19 quarters worsened to -1,414 billion rupiah in the third quarter & will be -1,462 billion rupiah in12 months time.
- At the current market value of 634 billion rupiah based on our forecasts it’s at 0.18 X assets with a 89 years payback & a 0% yield.
- Our cashflow forecast is 40 billion rupiah which means an 16 X valuation. A 12 X valuation gives a -24% lower target price of 128 rupiah.