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NRCA, a 23% higher target price
Current 288 Target 355 +23%
November 27th 2021
1 minute read
Sales jumped 17%
Costs 2 points lower, but higher above 100% in cashflow
Cashflow more negative, but expected positive
Balance sheet, higher leverage
Valuation, a 23% higher target price
1 minute read
Sales jumped 17%
- Sales jumped 17% in the third quarter to 368 billion rupiah vs our 321 billion rupiah forecast.
- This brings the quarterly average to -8% growth.
- We predict positive average growth of 9% to bring sales to 518 billion rupiah in the third quarter of 2022.
Costs 2 points lower, but higher above 100% in cashflow
- The cash cost ratio was at -97% in the third quarter giving a 8 billion rupiah net profit.
- The average Cashflow cost ratio is higher at -107% now.
- We use the latest -97% cost ratio to predict a 12 billion rupiah profit in the third quarter of 2022.
Cashflow more negative, but expected positive
- Free cashflow was more negative, -42 to -55 billion rupiah in the third quarter with -0 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at -18 billion rupiah now.
- We assume the same -0 billion rupiah investment spending which with higher sales gives a positive 15 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet, higher leverage
- Cash declined from 518 to 468 billion rupiah in the third quarter.
- Liabilities increased from 1,042 to 1,052 billion rupiah so net cash worsened from -524 to -584 billion rupiah.
- With our forecast cashflow & a -4 billion rupiah equity payout net cash will be -535 billion rupiah in 12 months time.
Valuation, a 23% higher target price
- NRCA capital from the last 23 quarters declined to 204 billion rupiah in the third quarter with a 5 billion rupiah increase in liabilities but will increase to 258 billion rupiah in12 months time.
- At the current market value of 696 billion rupiah based on our forecasts it’s at 0.32 X assets with a 32 years payback & a 1% yield.
- Our cashflow forecast is 54 billion rupiah which means an 13 X valuation. A 16 X valuation gives a 23% higher target price of 355 rupiah.