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RAJA, a 40% higher target price
Current 190 Target 265 +40%

December 5th 2021
1 minute read
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Sales declined -7%

• Sales declined -7% in the third quarter to 23 million dollars vs our 26 million dollars forecast.
• This brings the quarterly average to 2% growth.
• We predict average growth of 5% in this next 12 months to bring sales to 27 million dollars in the third quarter of 2022.

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Costs 2 points lower, higher profit

• The cash cost ratio was 2 points lower at -90% in the third quarter giving a 0.4 million dollars net profit.
• The average Cashflow cost ratio is at -96% now.
• We use the latest -90% cost ratio to predict a 0.9 million dollars profit in the third quarter of 2022.

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Cashflow, negative from asset sale loss

• Free cashflow was more negative -27 million dollars in the third quarter with -23 million dollars investment Cashflow from loss on asset sale.
• Average quarterly Cashflow is at -18 million dollars now.
• We assume 0 million dollars investment spending as real capex is small which with higher sales gives a positive 3 million dollars Cashflow in the third quarter of 2022.

Balance sheet, higher leverage

• Cash declined from 66 to 41 million dollars in the third quarter.
• Liabilities declined from 124 to 123 million dollars so net cash worsened from -58 to -82 million dollars.
• With our forecast cashflow & a -1 million dollars equity payout net cash will be -71 million dollars in 12 months time.

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Valuation, cheap, a 40% higher target price

• RAJA capital from the last 23 quarters worsened to -52 million dollars in the third quarter with 2 million dollars new liabilities but will be -41 million dollars in12 months time.
  
• At the current market value of 57 million dollars based on our forecasts it’s at 0.24 X assets with a 18 years payback & a 1% yield.
  
• Our 12 month cashflow forecast is 11 million dollars which means an 5 X valuation. A 7 X valuation gives a 40% higher target price of 265 rupiah.
  

Data file & model