TLKM
Contact our analyst Eka
9th August 2022
BUY
Price Rp 4,700
Target price Rp5,730
BUY
Price Rp 4,700
Target price Rp5,730
Maintained single digit growth
- TLKM maintained positive growth in 2Q2022 driven by Indihome and Telkomsel digital, with sales up +3.5% YoY or +4.5% QoQ to IDR 36.7 trillion. For 1H2022 TLKM maintained single digit growth of +3.6% YoY to IDR 71.9 trillion.
- IndiHome recorded +6.9% YoY growth to IDR 6.98 trillion in 2Q2022. The growth is inline with the increase in IndiHome new subscribers and a higher ARPU. Indihome’s total subscribers are now 8.89 million, up +7.1% YoY.
- Data, Internet & IT service revenue increased +5.4% YoY to IDR 20.3 trillion boosted by higher cellular data revenue during the Eid celebrations and long holiday in 2Q2022. Mobile data traffic jumped by 21.4% YoY in 1H2022 driven by strong mobile data services.
- Interconnection revenue also increased by 3.5% YoY to IDR 2.08 trillion in 2Q2022. Network and other telecommunication services revenues jumped by 17.5% YoY to IDR 2.77 trillion driven by increasing satellite and tower business.
- As the transition from legacy business to data continues, SMS, fixed and cellular voice revenue declined -13.8% YoY to IDR 4.57 trillion.
- We are targeting TLKM revenues to reach IDR 150.3 trillion this year as we expect demand will continue to grow.
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2Q2022 Results: Higher Margins
Valuation: Maintain BUY with TP 5,730
- TLKM maintained double-digit net income growth of 11.7% YoY or +17.6% QoQ in 2Q2022 to IDR 7.19 trillion with a higher NPM of 19.6% from 17.4% in 1Q2022. For 1H2022, TLKM net income reached IDR 13.3 trillion or up by +6.9% YoY.
- Operating profit increased +16.2% YoY or +3.4% QoQ to IDR 12.3 trillion, in line with a higher operating profit margin of 33.5% in 2Q2022.
- TLKM operating expenses increased by 3.5% YoY to IDR 12.3 trillion with Depreciation and amortization expenses up +21% YoY to IDR 9 trillion in line with continuous investments to enhance digital infrastructure for both mobile and fixed line businesses.
- EBITDA rose by +5.7% YoY to IDR 20 trillion in 2Q2022 and IDR 39.4 trillion in 1H2022 with a higher EBITDA margin of 54.8%.
- As greater efficiency continues to improve margins, we are expecting TLKM bottom line to reach IDR 26 trillion in 2022F.
Valuation: Maintain BUY with TP 5,730
- We are targeting TLKM to reach IDR 5,730, 22% upside, which is a 20x PE valuation within one year. We maintain our recommendation to BUY.
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