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MERK looking sharp with a 4% yield forecast & could be higher
MERK Current 3,950 Target 8,558 + 117%
Jun 24, 2022
1 minute read
Sales grew a strong 9%
Last 5 quarters
17% 0% 10% -0% 9%
Costs down profit up
Last 5 quarters
-76% -86% -84% -92% -77%
Cashflow positive again
Last 5 quarters billion rupiah
31, 55, 51, -21, 42
Balance sheet net cash improved, heading to positive
Last 5 quarters billion rupiah
-57, -26, -32, -146, -77
Capital paid flat , a 117% higher target price
Last 5 quarters billion rupiah
60, 60, 115, 114, 114
Jun 24, 2022
1 minute read
Sales grew a strong 9%
Last 5 quarters
17% 0% 10% -0% 9%
- Sales grew a strong 9% in the first quarter to 302 billion rupiah, which is 19% higher than a year ago.
- This brings the average to 5% growth.
- We predict faster average growth of 7% in this next 12 months to bring sales to 385 billion rupiah in the first quarter 2023.
Costs down profit up
Last 5 quarters
-76% -86% -84% -92% -77%
- The cash cost ratio went from -92% to -77% profit from 14 to 63 billion rupiah in the first quarter.
- The average cost ratio is at -86% now.
- We use the average -86% cost ratio to predict an 82 billion rupiah profit in the first quarter 2023.
Cashflow positive again
Last 5 quarters billion rupiah
31, 55, 51, -21, 42
- Free cashflow went positive again from -21 to 42 billion rupiah in the first quarter with low -5 billion rupiah investment spending.
- Average quarterly Cashflow is at 32 billion rupiah now.
- We assume the same low -5 billion rupiah investment spending which with higher sales gives a higher average 48 billion rupiah Cashflow in the next 12 months.
Balance sheet net cash improved, heading to positive
Last 5 quarters billion rupiah
-57, -26, -32, -146, -77
- Cash increased 196 to 237 billion rupiah in the first quarter.
- Liabilities declined 342 to 314 billion rupiah so net cash improved -146 to -77 billion rupiah .
- With our forecast cashflow & a -73 billion rupiah equity payout -58 billion rupiah liabilities payment net cash will be positive 41 billion rupiah in 12 months time.
Capital paid flat , a 117% higher target price
Last 5 quarters billion rupiah
60, 60, 115, 114, 114
- MERK 19 quarter capital paid was flat at 114 billion rupiah in the first quarter but will be 246 billion rupiah in12 months time.
- At the current market value of 1,770 billion rupiah based on our forecasts it’s at 1.6 X assets with a 4 years payback & a 4% yield.
- Our cashflow forecast is 192 billion rupiah which means a low 9 X valuation. A higher 20 X valuation gives a 117% higher target price 8,558 rupiah.