TLKM
Contact our analyst Eka
3rd September, 2021
BUY
Price Rp 3,370
Target price Rp5,260
BUY
Price Rp 3,370
Target price Rp5,260
Strong Indihome and mobile growth
- TLKM recorded a revenue increase of +9% YoY and +5% QoQ to IDR 35.5 trillion in 2Q2021. Indihome maintained double-digit growth of 23% to IDR 6.53 trillion. The growth is inline with the increase in IndiHome new subscribers and better ARPU. Indihome successfully added +152k new subscribers in 2Q2021, compared to 1Q2021’s +133k new subscribers. ARPU also increased +1.5% QoQ to IDR 270 thousand in 2Q2021.
- For 1H2021, TLKM booked 4% YoY revenue growth to IDR 69.48 trillion. The results is on track to meet our forecast (98%).
- Data, Internet & IT service revenue increased +9% YoY or 7% QoQ to IDR 20,4 trillion in 2Q2021, inline with higher data traffic of 3,306 petabyte on strong demand for mobile data services.
- Network and other telecommunication service revenue increased +29% YoY to IDR 2.36 trillion in 2Q2021 mainly due to higher business volume in managed services and tower leases.
- SMS, Fixed and Cellular voice revenue and Interconnection revenue declined in line with declining legacy international voice business and a transition from legacy to data.
- As demand is still growing, we expect TLKM’s revenue in 2021F will grow by a single digit +4.4% YoY to IDR 142.5 trillion.
Sign up now to trade; what you want, when you want, where you want.
Margin Continue to Improved
Valuation: Maintain BUY with TP 5,260
- As TLKM’s revenue grew in 2Q2021, TLKM’s net income recorded double-digit growth of +25.5% YoY and +7% QoQ to IDR 6.43 trillion with a higher NPM of 18.1% from 15.7% due to cost efficiencies in mobile and fixed line. Operating profit margins also showed an improvement from 31.6% to 33.5% in 2Q2021.
- For 1H2021, TLKM posted net income of IDR 12.5 trillion, up 13.3% YoY with a better NPM of 17.9% compared to 16.4% last year.
- EBITDA also grew +4.7% YoY to IDR 37.8 trillion in 1H2021, and the EBITDA margin expanded to 54.4% from 54.0%.
- As the cost efficiencies are resulting in improvements in 1H2021, we revise our TLKM bottom line target from single-digit growth to double-digit growth of 16% YoY to IDR 24.15 trillion in 2021F.
Valuation: Maintain BUY with TP 5,260
- We are targeting TLKM to reach IDR 5,260, 56% upside, which is a 20x PE valuation within one year. We maintain our recommendation to BUY.
Previously
