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MEDC, a 42% higher target price
Current 484 Target 688 +42%
December 23rd 2021
1 minute read
Sales declined -5%
Costs 1 point higher, profit down
Cashflow back to positive
Balance sheet lower leverage
Valuation, a 42% higher target price
1 minute read
Sales declined -5%
- Sales declined -5% in the third quarter to 320 million dollars vs our 340 million dollars forecast.
- This brings the quarterly average to 8% growth.
- We predict average growth of 5% in this next 12 months to bring sales to 384 million dollars in the third quarter of 2022.
Costs 1 point higher, profit down
- The cash cost ratio went from -64% to -65% profit from 36 to 26 million dollars in the third quarter.
- The average Cashflow cost ratio is higher at -80% now.
- We use a median -68% cost ratio to predict a 39 million dollars profit in the third quarter of 2022.
Cashflow back to positive
- Free cashflow turned back positive from -60 to 25 million dollars in the third quarter with -26 million dollars investment Cashflow.
- Average quarterly Cashflow is at 12 million dollars now.
- We assume higher -32 million dollars investment spending which with higher sales gives a higher 60 million dollars Cashflow in the third quarter of 2022.
Balance sheet lower leverage
- Cash increased 431 to 482 million dollars in the third quarter.
- Liabilities declined 4,125 to 4,045 million dollars so net cash improved -3,694 to -3,563 million dollars.
- With our forecast cashflow & a -36 million dollars equity payout -290 million dollars liabilities payment net cash will be -3,273 million dollars in 12 months time.
Valuation, a 42% higher target price
- MEDC capital from the last 27 quarters worsened -1,248 to -1,275 million dollars in the third quarter with 28 million dollars new liabilities & a -2 million dollars equity payout but will improve to -1,069 million dollars in12 months time.
- At the current market value of 866 million dollars based on our forecasts it’s at 0.17 X assets with a 23 years payback & a 4% yield.
- Our cashflow forecast is 205 million dollars which means an 4 X valuation. A 6 X valuation gives a 42% higher target price of 688 rupiah.