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PSAB, a 46% higher target price
Current 142 Target 208 +46%

December 7th 2021
1 minute read
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Sales slumped -29%, recovery predicted

• Sales slumped -29% in the third quarter to 43 million dollars vs our 70 million dollars forecast.
• This brings the quarterly average to -6% growth.
• We predict a recovery with average growth of 10% in this next 12 months to bring sales to 62 million dollars in the third quarter of 2022.

Costs flat, but better in Cashflow

• The cash cost ratio was flat at -79% in the third quarter giving a -9 million dollars net profit.
• The average Cashflow cost ratio is at -68% now.
• We use the Cashflow -68% cost ratio to predict a 5 million dollars profit in the third quarter of 2022.

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Cashflow, only a small negative will turn positive

• Free cashflow was a small negative -1 million dollars in the third quarter with -16 million dollars investment Cashflow.
• Average quarterly Cashflow is at 1 million dollars now.
• We assume lower -10 million dollars investment spending which with higher sales gives a 8 million dollars Cashflow in the third quarter of 2022.

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Balance sheet, higher leverage

• Cash declined from 5 to 4 million dollars in the third quarter.
• Liabilities increased from 533 to 546 million dollars so net cash worsened from -528 to -542 million dollars.
• With our forecast cashflow & a 0 million dollars equity payout net cash will be -508 million dollars in 12 months time.

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Valuation, with recovery, a 46% higher target price

• PSAB capital from the last 23 quarters was slightly higher -62 million dollars in the third quarter with only 1 million dollars new liabilities & will be -39 million dollars in12 months time.
  
• At the current market value of 268 million dollars based on our forecasts it’s at 0.29 X assets with a 33 years payback & a 0% yield.
  
• Our 12 month cashflow forecast is 28 million dollars which means an 10 X valuation. A 14 X valuation gives a 46% higher target price of 208 rupiah.
  

Data file & model