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PSDN, a 108% higher target price
Current 173 Target 359 +108%
November 8th 2021
1 minute read
Sales flat
Costs, higher but lower in Cashflow
Cashflow jumped
Balance sheet
Valuation, a 5% yield & 108% higher target price
1 minute read
Sales flat
- Sales were flat 0% growth in the third quarter to 207 billion rupiah vs our 206 billion rupiah forecast.
- This brings the quarterly average to 8% growth.
- We predict average growth of 7% in this next 12 months to bring sales to 271 billion rupiah in the third quarter of 2022.
Costs, higher but lower in Cashflow
- The cash cost ratio was higher at -110% in the third quarter giving a -20 billion rupiah net profit.
- But the Cashflow cost ratio is better at -87% now.
- We use the -87% cost ratio as sales rise to predict a 31.8 billion rupiah profit in the third quarter of 2022.
Cashflow jumped
- Free cashflow jumped back to 26 billion rupiah in the third quarter with -2 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at 2 billion rupiah now.
- We assume -1.5 billion rupiah investment spending which with higher sales gives a 34.3 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet
- Cash increased from 24 to 33 billion rupiah in the third quarter.
- Liabilities increased slightly from 665 to 669 billion rupiah so net cash improved from -641 to -636 billion rupiah
- With our forecast cashflow & a -11.9 billion rupiah equity payout net cash will be -519 billion rupiah in 12 months time.
Valuation, a 5% yield & 108% higher target price
- PSDN capital from the last 27 quarters was -212 billion rupiah in the third quarter & will be -83 billion rupiah in12 months time.
- At the current market value of 249 billion rupiah based on our forecasts it’s at 0.35 X assets with a 5 years payback & a 5% yield.
- Our cashflow forecast is 129 billion rupiah which means an 2 X valuation. A 4 X valuation gives a 108% higher target price of 359 rupiah.