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MRAT, a -8% lower target price
Current 248 Target 229 -8%
December 9th 2021
1 minute read
Sales declined -9%, faster growth ahead
Costs up 2 points, net loss expected to turn to profit
Cashflow more negative on higher investment, expected to turn positive
Balance sheet, higher leverage
Valuation, a -8% lower target price
1 minute read
Sales declined -9%, faster growth ahead
- Sales declined -9% in the third quarter to 80 billion rupiah vs our 86 billion rupiah forecast.
- This brings the quarterly average to 1% growth.
- We predict faster average growth of 5% in this next 12 months to bring sales to 95 billion rupiah in the third quarter of 2022.
Costs up 2 points, net loss expected to turn to profit
- The cash cost ratio was up 2 points at -99% in the third quarter giving a -2.0 billion rupiah net profit.
- The average Cashflow cost ratio is still above 100% at -107% now.
- We use a lower -97% cost ratio as sales rise to predict a 0.7 billion rupiah profit in the third quarter of 2022.
Cashflow more negative on higher investment, expected to turn positive
- Free cashflow was slightly lower at -5 billion rupiah in the third quarter with higher -3 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at -7 billion rupiah now.
- We assume lower -1.0 billion rupiah average investment spending which with higher sales gives a positive 2.2 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, higher leverage
- Cash declined from 6 to 5 billion rupiah in the third quarter.
- Liabilities increased from 222 to 226 billion rupiah so net cash worsened from -216 to -221 billion rupiah.
- With our forecast cashflow & a -1 billion rupiah equity payout net cash will be -214 billion rupiah in 12 months time.
Valuation, a -8% lower target price
- MRAT capital from the last 27 quarters worsened to -70 billion rupiah in the third quarter with 3 billion rupiah new liabilities but will be -62 billion rupiah in12 months time.
- At the current market value of 106 billion rupiah based on our forecasts it’s at 0.19 X assets with a 69 years payback & a 1% yield.
- Our 12 month cashflow forecast is 8.1 billion rupiah which means an 13 X valuation. A 12 X valuation gives a -8% lower target price of 229 rupiah.