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PZZA, a 45% higher target price
Current 685 Target 993 +45%

December 7th 2021
1 minute read

Sales declined -16%

• Sales declined not surprisingly by -16% in the third quarter to 815 billion rupiah vs our 955 billion rupiah forecast.
• This brings the quarterly average to 1% growth.
• We predict average growth of 7% in this next 12 months to bring sales to 1,048 billion rupiah in the third quarter of 2022.

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Costs higher & a loss again, but will turn positive again

• The cash cost ratio was at -90% in the third quarter giving a -18 billion rupiah net profit.
• The average Cashflow cost ratio is at -88% now.
• We use the cashflow -88% cost ratio to predict a positive again 28 billion rupiah profit in the third quarter of 2022.

Cashflow negative too, but will turn positive again

• Free cashflow was -117 billion rupiah in the third quarter with higher -79 billion rupiah investment Cashflow.
• Average quarterly Cashflow is at -13 billion rupiah now.
• We assume lower -65 billion rupiah investment spending which with higher sales gives a 59 billion rupiah Cashflow in the third quarter of 2022.

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Balance sheet, higher leverage

• Cash increased from 33 to 36 billion rupiah in the third quarter.
• Liabilities increased from 953 to 1,012 billion rupiah so net cash from -920 to -976 billion rupiah.
• With our forecast cashflow & a -22 billion rupiah equity payout net cash will be -800 billion rupiah in 12 months time.

​Valuation, a 45% higher target price

• PZZA capital from the last 19 quarters worsened to -551 billion rupiah in the third quarter with 117 billion rupiah new liabilities & will be -352 billion rupiah in12 months time.
• At the current market value of 2,059 billion rupiah based on our forecasts it’s at 1.03 X assets with a 10 years payback & a 1% yield.
• Our 12 month cashflow forecast is 199 billion rupiah which means an 10 X valuation. A 15 X valuation gives a 45% higher target price of 993 rupiah.

Dat@ file & model