TLKM
Contact our analyst Eka
10th May, 2021 BUY
Price Rp 3,190
Target price Rp4,500
Price Rp 3,190
Target price Rp4,500
Double digit growth in Indihome and Interconnection
- TLKM recorded a revenue increase of +0.7% YoY to IDR 136.4 trillion driven by Indihome, Interconnection, and mobile data, while the legacy business (SMS, Fixed and cellular voice) is still declining. The revenue is above our expectation (101%).
- IndiHome revenue contribution increased to 16% from 14%. Indihome recorded revenue of IDR 22.2 trillion, up by 21.2% YoY. The growth is inline with the increase in IndiHome new subscribers.
- Indihome successfully added +1.01 million new subscribers, +14.5% YoY to 8.02 million in 2020. ARPU also increased +3.5% QoQ to IDR 262 thousand in 4Q2020.
- Interconnection revenue also grew double digits +22% to IDR 7.66 trillion due to a strong performance in overseas wholesale voice revenue during the pandemic.
- Data, internet & IT services revenues grew single digit +8% YoY to IDR 71 trillion, and remains the biggest contributor of revenues (52%). Data traffic jumped by 43.8% YoY driven by strong growth in mobile data services.
- We expect demand from data centers, Cloud, Application services, fixed broadband, interconnection will still increases this year inline with a recovery in purchasing power in the domestic economy.•
Sign up now to trade; what you want, when you want, where you want.
2020FY Results: Margin Improved
Valuation: Maintain BUY with TP 4,500
- With higher revenue, TLKM booked double digit net profit growth in 2020 to IDR 20.8 trillion with a higher NPM of 15% from 14% in 2019.
- EBITDA also grew +11.2% YoY to IDR 72.1trillion in 2020, with a stable EBITDA margin of 52.8%.
- TLKM is maintaining expenses well with total expenses including depreciation, amortization, and others down by -3.8% YoY in 2020 to IDR 54 trillion. The decline is due to lower operational & maintenance costs and lower cost of tower & space rental impacted by PSAK 73. OPM also improved slightly from 31% to 32% in 2020.
- We are expecting flat to slightly positive-growth in 2021F net income as we estimate the current trends will likely continue and will drive growth of mobile and broadband.
Valuation: Maintain BUY with TP 4,500
- We are targeting TLKM to reach IDR 4,500, 41% upside, which is a 18.5x PE valuation within one year. We maintain our recommendation to BUY.
Previously
