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MDRN, a -68% lower target price
Current 50 Target 16 -68%
November 22nd 2021
1 minute read
Sales declined-8%
Costs 5 points lower
Cashflow positive with working capital
Balance sheet, higher leverage
Valuation, a 68% lower target price
1 minute read
Sales declined-8%
- Sales declined -8% in the third quarter to 17 billion rupiah vs our 21 billion rupiah forecast.
- This brings the quarterly average to -5% growth.
- We predict average growth of 14% to bring sales to 29 billion rupiah in the third quarter of 2022.
Costs 5 points lower
- The cash cost ratio was 5 points lower at -102% in the third quarter giving a -2 billion rupiah net profit.
- The average Cashflow cost ratio is at -87% now.
- We use -91% cost ratio to predict a 1 billion rupiah profit in the third quarter of 2022.
Cashflow positive with working capital
- Free cashflow was positive again at 2 billion rupiah in the third quarter with working capital & despite a -4 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at 2 billion rupiah now too.
- We assume -0 billion rupiah investment spending which with higher sales gives a 2 billion rupiah Cashflow again in the third quarter of 2022.
Balance sheet, higher leverage
- Cash was flat at 1 billion rupiah in the third quarter.
- Liabilities increased from 846 to 848 billion rupiah so net cash worsened from -845 to -847 billion rupiah
- With our forecast cashflow & a -1 billion rupiah equity payout net cash will be -839 billion rupiah in 12 months time.
Valuation, a 68% lower target price
- MDRN capital from the last 27 quarters improved 1 billion to -70 billion rupiah in the third quarter & will be -61 billion rupiah in12 months time.
- At the current market value of 382 billion rupiah based on our forecasts it’s at 1.30 X assets with a 35 years payback & a 0% yield.
- Our cashflow forecast is 9 billion rupiah which means an 44 X valuation. A 15 X valuation gives a -68% lower target price of 16 rupiah.