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WMUU, a -19% lower target price
Current 155 Target 126 -19%
December 29th 2021
1 minute read
Sales grew 24%
Costs up 1 point, profit up
BUT…Cashflow more negative with high investment
Balance sheet higher leverage
Valuation, expensive, a -19% lower target price
1 minute read
Sales grew 24%
- Sales grew 24% in the third quarter to 881 billion rupiah & are up 184% from a year ago!
- This brings the quarterly average to 24% growth.
- We predict more modest average growth of 8% in this next 12 months to bring sales to 1,168 billion rupiah in the third quarter of 2022.
Costs up 1 point, profit up
- The cash cost ratio went up 1 point from -92% to -93% profit from 49 to 56 billion rupiah in the third quarter.
- The average cost ratio is at -92% now.
- We use the latest -93% cost ratio to predict a 77 billion rupiah profit in the third quarter of 2022.
BUT…Cashflow more negative with high investment
- Free cashflow went from -84 to -161 billion rupiah in the third quarter with higher -186 billion rupiah investment Cashflow.
- Average quarterly Cashflow is at -115 billion rupiah now.
- We assume lower -129 billion rupiah investment spending which with higher sales gives a -45 billion rupiah Cashflow in the third quarter of 2022.
Balance sheet higher leverage
- Cash increased 31 to 54 billion rupiah in the third quarter.
- Liabilities increased 740 to 946 billion rupiahso net cash worsened -709 to -892 billion rupiah.
- With our forecast cashflow & a 0 billion rupiah equity payout 214 billion rupiah liabilities payment net cash will be -1,107 billion rupiah in 12 months time.
Valuation, expensive, a -19% lower target price
- WMUU capital from the last 19 quarters worsened -1,366 to -1,550 billion rupiah in the third quarter with 185 billion rupiah new liabilities, a -2 billion rupiah equity payment & will be -1,660 billion rupiah in12 months time.
- At the current market value of 9,263 billion rupiah based on our forecasts it’s at 3.57 X assets with a 0% yield.
- Our operating cashflow forecast is 302 billion rupiah which means an 31 X valuation. A 25 X valuation gives a -19% lower target price of 126 rupiah.