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NISP, very cheap & cashflow rising
​Current 640 Target 797 +24%

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February 1 2022
1 minute read

Sales grew 7%

• Sales grew 7% in the fourth quarter to 3,178 billion rupiah which is -4% from a year ago.
• This brings the quarterly average to -1% growth.
• We predict faster average growth of 2% in this next 12 months to bring sales to 3,403 billion rupiah in the fourth quarter of 2022.

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Costs down profit down on provisions, but expected to almost double

• The cash cost ratio went from -60% to -54% profit from 562 to 485 billion rupiah in the fourth quarter with higher provisions.
• The average cost ratio is at -60% now.
• We use an average -57% cost ratio with lower provisions to predict a 840 billion rupiah profit in the fourth quarter of 2022.

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Cashflow rising

• Free cashflow went from 1,309 to 1,445 billion rupiah in the fourth quarter with -107 billion rupiah investment Cashflow.
• Average quarterly Cashflow is at 1,104 billion rupiah now.
• We assume lower -95 billion rupiah investment spending which with higher sales gives a 1,375 billion rupiah Cashflow in the fourth quarter of 2022.

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Balance sheet, faster growth, higher sales to assets

• Non cash assets growth increased 0.9% to 4.0% in the fourth quarter. Average growth is 0.7% now.
• Liabilities growth declined 5.7% to 1.5% in the fourth quarter. Average growth is 0.8% now.
• The sales to asset ratio is low, but improved 1.5% to 1.6% in the fourth quarter. Average sales to assets is 1.6% now.

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Valuation, very cheap a 24% higher target price for now

• NISP capital paid from the last 12 quarters was flat at 1,632 billion rupiah in the fourth quarter.but will rise to 2,556 in12 months time.
• At the current market value of 14,680 billion rupiah based on our forecasts it’s very cheap at 0.07 X assets with a 6% yield.
• Our cashflow forecast is 5,221 billion rupiah which means an 3 X valuation. A 4 X valuation gives a 24% higher target price of 797 rupiah.

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