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MCI (P) 019/11/2014 Ref. No.: INDO2015_0005
Telekomunikasi Indonesia (TLKM ID)
Strong data business to drive revenue growth
INDONESIA | TELECOMMUNICATION | INITIATION
23 March 2015
Company Overview
Telekomunikasi Indonesia (“Telkom”) is a state-owned enterprise and
currently the largest telecommunication services and network provider
in Indonesia with 25,011 employees.
Telkom’s shares are traded on the Indonesia Stock Exchange (“IDX”),
the New York Stock Exchange (“NYSE”), the London Stock Exchange
(“LSE”) and Publicly Offered Without Listing (“POWL”) in Japan.
Currently has 9 direct subsidiaries, 21 indirect subsidiaries, 3 affiliated
companies, and 2 joint venture companies with business portfolio
includes fixed wireline and fixed wireless, mobile, internet and data
communication, network, interconnection, and other services.
Initiate with “ACCUMULATE” rating with price target of IDR 3,350.
Investment Merits
One of the largest Indonesian companies. Telkom has market
capitalization close to IDR 300 trillion, one of the largest companies in
Indonesia.
Indonesia’s leading Telecommunication Company. Telkomsel is the
market leader in cellular with more than 139 million customers, capturing
42% market share.
The first big carrier to commercially launch 4G LTE. Telkomsel is the
first operator that succeeded the use of 4G LTE network in Bali and Jakarta
in FY14, and soon to be launched in six other big cities.
Our top picks stock in Indonesia’s Telco industry. Telkom is a highly
profitable company with double-digit ROA and ROE for the last 5 years with
a low net gearing of 0.27x.
Has the highest ARPU among peers. Telkom successfully increased its
ARPU to IDR 40,000 in FY14 following an improvement in its tariffs
structure, the highest as compared to its competitors such as Indosat and
XL.
Risk Factor
Fluctuations in Indonesian Rupiah. A depreciation of Rupiah could
result in an increase of Telkom’s capital expenditure as most of its capex
are priced in reference to foreign currencies, while a substantial amount of
its revenue is in Rupiah.
Intense competition within the sector. The competition against
Indosat and XL, potential cause further decrease in number of subscribers
to Telkomsel, especially in cellular and fixed line services.
Rapidly changing environment. The telecommunication industry is
characterized with rapid and significant changes in technology which
requires huge investment and significant capital in those areas.
ACCUMULATE CMP IDR 2,930
TARGET IDR 3,350 (+14.3%) COMPANY DATA
O/S SHARES (BN) : 100.80
MARKET CAP (IDR TN) : 294.34
MARKET CAP (USDBN) : 22.41
52 - WK HI/LO (IDR) : 2,985/2,160
3M AVG. VOLUME (MN SHARES): 78.53
PAR VALUE (IDR) : 500
MAJOR SHAREHOLDERS, %
GOVERNMENT : 52.6%
PUBLIC & OTHERS : 47.4%
PRICE VS. JCI
80
90
100
110
120
130
140
Feb-14 May-14 Aug-14 Nov-14 Feb-15
TLKM IJ JCI Rebased
Source: Phillip Securities Indonesia Research
KEY FINANCIALS
IDR bn FY14E FY15E FY16E FY17E
Revenue 89,696 95,369 102,252 109,692
EBIT 29,377 31,106 33,854 37,066
Net Profit 14,638 16,714 18,514 20,979
EPS, IDR 151 172 191 216
PER, x 19.00 19.46 17.57 15.50
P/BV, x 3.23 3.29 2.88 2.47
ROE, % 21.6 21.3 20.5 20.4
Debt/Equity (%) 27.2 28.1 24.8 23.0
Source: Phillip Securities Indonesia Research Est.
Valuation Method: Discounted Cash Flow (DCF)
Milka Mutiara (+62 57900800) [email protected]
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Investment Action
We initiate coverage on Telkom with “Accumulate” rating. We favour the
stock for its (1) strong growth in data business following the launch of
its 4G LTE network, (2) strong and still-growing smart phone
penetration in Indonesia, and (3) aggressive investment and consistent
strategy. Based on our FY15F P/E of 19.46x and a P/B of 3.29x, we
derive our target price of IDR 3,350 with potential upside of 14.3%
(excluding DPS of IDR 69).
Telkom’s revenue and expense breakdown
Revenue Breakdown Expense Breakdown
Cellular38%
Fixed Line10%
Intercon-nection
5%
Data42%
Network2%
Others3%
Operations, maintenance, telco services
37%
Depreciation and
amortization28%
Personnel16%
Intercon-nection
8%
G&A5%
Others6%
Source: Company, PSI Research
Telecommunication Industry in Indonesia
Rapid growth industry in Indonesia
Indonesia’s telecommunication industry has undergone fast-paced
development since 1993 following the introduction of a scheme by the
government in cooperation with state owned enterprise, Telkom, to
install millions of fixed telephone lines from 1993-1997. The rise of
mobile telephony later transformed the communication landscape across
the archipelago by connecting friends, relatives and business users in
both major islands and far flung areas of the country.
In 1997 the country only had 1 million cellular phone subscribers and it
grew dramatically to reach 11.3 million subscribers by 2002 surpassing
the number of fixed line users driven by more affordable mobile phone
tariffs resulting from an increased price competition in the mobile sector
due to the deregulation in 1999. The cellular phone sector continued to
grow at a dramatic pace with the number of users tripling for five years
from 2005 – 2010, reaching 211 million customers in 2011 (Directorate
General of Post and Telecommunications) with the average Indonesian
owning 1.68 sim cards per person.
Indonesia is the fourth largest mobile market in the world and also the
world’s top ten 3G markets, with broadband users skipping fixed
connections and going straight to mobile phone. The rapid move in
smart phones means the mobile operators play a major part in providing
With the fourth largest mobile market in the world and a fast growing middle class segment as well as Indonesia’s economy, are expected to drive further demands for telecommunication.
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internet services. Fast growing middle class segment as well as
Indonesia’s economy that has shown stable and respectable growth in
recent years are expected to drive further demands for
telecommunication and data services.
Tight competition among Telco operators
Telecommunication companies and mobile phone manufacturers now
face a stiff competition in attracting and retaining users where majority
of them are youngsters being aged between 10-39 years and therefore
very price sensitive and could easily switch from one provider to
another. These youngsters have grown up being accustomed to using
mobile telephones as their main communication device which made the
market highly receptive to the latest trends in netbooks and tablets
computers thereby creating a new realm of competition for devices, data
and roaming packages.
The Indonesian mobile telecommunication industry is dominated by
three main players namely Telkomsel, a subsidiary of Telkom, Indosat
which is also partly state owned and XL Axiata which is a private sector
company. Other competitors include Hutchinson Telcom’s 3 network,
Axis Telecom Indonesia and other smaller players are in the code
division multiple access technology market (CDMA).
Downtrend of fixed line business
Compared to the growth in fixed wired-line telephony for decades that
eventually stagnated at only around 9.4 million lines, the
telecommunication tele-density in Indonesia, however, experienced a
very significant jump in less than 20 years to more than 310 million
lines, driven primarily by the growth of cellular phones, as well as fixed
wireless telephone. The cellular telephony business continues to grow
through innovations as well as constant adaptation to changes in market
demands and consumer preferences. While the growth in voice and
Short Messaging Service (“SMS”) has shown signs of declining in recent
years, at the same time, it marks a strengthening in the growth of data
communication and mobile internet access services.
Strong growth of data telecommunication services
Despite the low internet penetration in the country as compared to
peers in the region, people in Indonesia are becoming increasingly
adoptive to global trends in digital lifestyle, as shown especially in the
increase of number of smartphone usage with more affordable prices as
well as higher levels of social networking activities. We expect that the
growth of mobile internet services will continue to be fueled on the back
of the increasing popularity for smartphone, tablets, and other internet-
enabled mobile devices in Indonesia. Faster data transmission for
wireless networks, and increasingly affordable smart devices and mobile
internet services, all are also contributing to the strong growth.
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Company Profile
History
Telkom Milestones
Source: Company
Company Overview
Telkom is a State-Owned Enterprise and currently the largest
telecommunication services and network provider in Indonesia. Telkom
serves millions of customers throughout Indonesia with a complete
range of telecommunications services that include fixed wireline and
fixed wireless telephone connections, cellular services, network and
interconnection services, as well as internet and data communication
services. Telkom also provides services in information, media and
edutainment, including cloud-based and server-based managed
services, e-Payment and IT enabler services, Pay-TV, as well as e-
Commerce and other portal services.
Business Model and Business Segment
Purposes: Telkom’s vision is to become a leading Telecommunication,
Information, Media, Edutainment and Services (“TIMES”) player in the
region. Telkom is also dedicated to provide “more for less” TIMES
services and to be the role model as the best managed corporation in
Indonesia.
Business Segments: Telkom Indonesia is involved in 7 business
segments: 1) Cellular, 2) Fixed line, 3) Interconnection, 4) Internet and
data communication, 5) Network, 6) Ancillary and others. The following
diagram provides segmental information by revenue.
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Business segment by revenue
Source: Company, PSI Research
1) Cellular services
Telkom provides cellular communications services using GSM technology
through its subsidiary, Telkomsel. Telkom has two primary types of
cellular products and services, postpaid services represented by
“kartuHalo” and prepaid services represented by simPATI (can be
purchased at any cellular shop and top up vouchers) and Kartu As (bills
customers based on seconds of talk time).
2) Fixed line services
Fixed line services include: (1) fixed wireline and (2) fixed wireless
services. Fixed wireline include local, direct long distance (“DLD”), and
international services, as well as other telecommunications and
supporting services. Fixed wireless services include local and direct long-
distance CDMA-based telephone services.
3) Interconnection services
Telkom also earns revenue from other telecommunications operators
that utilize its extensive network infrastructure in Indonesia, both for
calls that end at or transit via its network.
4) Internet and data services
Currently, data services is the largest contributor to Telkom’s revenue at
42%. Telkom provides a wide range of products and services in data
telecommunication and internet services such as: broadband internet
(under the commercial name “Speedy” and “Speedy Instan”), cellular
data communication (with the commercial name “Flash”, blackberry
package and non package data services), SMS services, internet access
services, Wi-Fi/hotspot, etc.
5) Network services
Telkom directly manages the provision of network services to customers
including Telkom’s business partners, commercial businesses and OLOs.
Telkom’s network services include satellite transponder leasing, satellite
broadcasting, VSAT, audio distribution, as well as satellite-based and
terrestrial-based leased lines.
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6) Ancillary and others
Telkom has exclusive agreements with some investors under revenue
sharing agreements to expand fixed line phone services, public card
phones (including their maintenance), data and internet networks, and
ancillary facilities related to telecommunications.
Telkom’s business and portfolio
Source: Company
Subsidiaries
Until FY14, Telkom has 9 direct subsidiaries, 21 indirect subsidiaries, 3
associated companies, and 2 joint venture companies.
Telkom’s corporate structure
Source: Company
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Investment Thesis
One of the largest Indonesian companies
Currently, Telkom has market capitalization close to IDR 300 trillion,
surely one of the largest companies in Indonesia. Telkom’s market cap
grew rapidly from mid-October last year where the market cap was only
around IDR 280 trillion. Currently, in telecommunications sector, Telkom
has the biggest market capitalization, while its competitors, Indosat only
has IDR 23.2 trillion and XL with IDR 33.7 trillion market capitalization.
Market leader in Indonesia telecommunication industry
Telkomsel is the market leader in cellular with more than 139 million
users. Together with Indosat and XL, they control up to 80.4% of the
total market share. As of FY13, Telkomsel controlled 42.4% of cellular
market, while Indosat and XL controlled 19.2% and 18.7%, respectively.
Going forward, Telkomsel continues to maintain its mobile subscribers
base at 42% market share. Moreover, being the eldest player in Telco
services, Telkom also has the largest telephone line capacity. The
number of lines with Telkom’s service amounting to 10.65 million units
in FY13 or 99% of the total number of lines in service.
The first big carrier to commercially launch 4G-LTE
Telkomsel has been granted the license to commercialize the new 4G-
LTE services by The Ministry of Communications and Information.
Telkomsel is the first operator that succeeded the use of 4G LTE network
in Bali and Jakarta in FY14, and soon to be launched in six other big
cities. The 4G-LTE improves the quality of Telkomsel services for its
customers who require fast access and data processing, which will
increase its value-added in terms of speed.
Our top picks stock in Indonesia’s Telco industry
Telkom is a highly profitable company with double-digit ROA and ROE
for the last 5 years with a low net gearing of 0.27x. Telkom capitilizes
on strong growth from its subsidiary, particularly Telkomsel, due to
extensive usage of mobile data and customer-based services. Telkomsel
has strong competitive advantage which related to its network coverage
and product innovation. We expect strong gains from Telkom’s data
business to help offset slowing mobile subscribers growth in Indonesian
market.
Has the highest ARPU among peers
As of 3Q14, Telkom has the highest average revenue per user (ARPU) of
IDR 39,000 as compared to XL with only IDR 36,000 and Indosat with
IDR 37,000. Telkom continued to successfully increase its ARPU to IDR
40,000 in FY14 following an improvement in its tariffs structure which
contributed to 8.1% increase in revenue to IDR 89.7 trillion for the year.
We believe Telkom can maintain its high ARPU along with its quality
improvement following the commercialization of 4G LTE.
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Risk Factor
Fluctuations in Indonesian Rupiah
A depreciation of Rupiah could result in losses on foreign exchange
translation, significantly affect its total expenses and net income and
reduce the USD amounts of dividends received by shareholders. The
depreciating rupiah also increased the Rupiah cost for Telkom’s capital
expenditure as most of its capex are priced in reference to foreign
currencies, mainly USD and Euros, while a substantial amount of its
revenue is in Rupiah.
Intense competition within the sector
Telkomsel’s competition against Indosat and XL, potential cause further
decrease in number of subscribers, especially in cellular and fixed line
services. The increasing popularity of mobile voice services also weighed
on Telkom’s revenues derived from its wireline voice services. Moreover,
Telkom’s fixed wireless telephone business also faces competition from
an increasing number of operators, including Bakrie Telecom and
Indosat, as well as mobile cellular services, SMS, VoIP services, and
email.
Rapidly changing environment
The telecommunication industry is characterized with rapid and
significant changes in technology which requires huge investment,
significant capital and human resources to support the development of
relevant competencies within the sector. In addition, new products and
services may be expensive to develop and the risk of new comers in the
marketplace is also visible.
Higher dividend payout
An increase in dividend payout potentially lowers retained earning for
Telkom, hence diluting its fair value. We expect Telkom to distribute
40% dividend payout in FY14-19F, lower than 70% payout ratio in FY13.
The decrease in fair value varies from 0.6% to 3.2% for every 10%
additional dividend payout ratio in FY14-19F.
Investment Correlation
The correlation between Telkom’s stock price and the Jakarta Composite
Index (JCI) has been 62.9% positive over the past 12 months. Among
Indonesian telco companies, Telkom’s share price movement has the
highest correlation with the JCI.
Telkom’s share price movement among telco sector companies
and its correlation with the JCI over the past 12 months
Correlation - r JCI
Telekomunikasi Indonesia 62.9%
Indosat 12.8%
XL Axiata 32.8%
Smartfren 16.1%
Average 31.2%
2000
2500
3000
Feb-
14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-1
4
Aug
-14
Sep-
14
Oct
-14
Nov
-14
Dec
-14
Jan-
15
Feb-
15
TLKM IJ JCI - rebased
Source: Bloomberg, PSI Research
Telkom’s share price movement has 62.9% positive correlation with the JCI over the past 12 months.
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Financial Review and Forecast
Capital Expenditure
Based on the management guideline, Telkom is expected to allocate
capex of IDR 24 trillion or roughly 25% of its revenue in FY15 compared
to 22% in FY14. Its subsidiary, Telkomsel, would require IDR 10 trillion
to build cloud computing and 12,000 new BTSs. While the rest of IDR 14
trillion will be used for infrastructure development and other
subsidiaries.
Additional Debt
Based on FY14 result, Telkom increased its total borrowings to IDR 23.5
trillion compared to IDR 20 trillion in 2013. Currently, the net gearing is
0.27x, lower than Telco industry average of 0.60x. Given the low cash
flows expectation in FY15 and FY16 we reckon that next investments
can largely be funded externally and increases its net gearing.
Earnings Forecast
We expect to see significant growth of 14% in PATMI in FY15 to IDR
16.73 trillion compared to IDR 14.64 trillion in FY14, and double-digit
earnings growth for the next 5 years. FY15 earnings will mainly come
from: (1) strong growth in data business following the launch of its 4G
LTE network, (2) strong and still-growing smart phone penetration in
Indonesia, and (3) aggressive investment and consistent strategy.
Management target for FY15:
(1) Expanding business penetration into 3 more countries (Taiwan, Arab
Saudi, New Zealand) to reach target of 10 countries by 2015.
(2) The ARPU of its data business services to grow 30% backed by its
4G LTE technology.
(3) Higher annual capex budget of IDR 22-25 trillion in FY15.
(4) Revenue to grow 20%, higher than the Telco industry average in
Indonesia.
We forecast the earnings of Telkom by estimating subscription growth
and ARPU growth for its various business segments. In our estimates,
we assume Telkom’s ARPU in cellular business to decline 2 – 5% in FY15
– FY19F while data business to increase 0.5 – 2% in the same period.
Dividend
Telkom’s dividend policy is determined every year through the General
Meeting of Shareholders (GMS). In FY13, Telkom paid full-year dividend
of IDR 102, translating into payout ratio of 70%, compared to 65% in
FY12. We expect lower dividend payout ratio of 40% in the future along
with government policy to decrease State-owned enterprises’ dividend
payout.
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Telkom’s dividend and payout ratio over FY10-15F
Source: PSI Research Est.
Valuation
We initiate coverage on Telkom with Accumulate rating at price target of
IDR 3,350. Our price target is derived using DCF valuation model with
10.1% WACC and 3% terminal growth. While favourable demographics,
strong growth in smart phone market share and rising digital lifestyles
provide good growth prospects for Telkom, we deemed that the stock
may be fairly valued at the moment, with FY15F P/E of 19.46x. Positive
price catalyst includes concrete plans for Telkom’s expansion network
and area.
We compared Telkom with its telecommunication peers both regionally
and globally. The average industry P/E for the peers currently stands at
24.08x for FY15F. Telkom is currently trading at 23.7% discount
compared to its peers while delivering a higher Return on Equity (ROE)
and net margin. Our price target is IDR 3,350, with an upside potential
of 14.3% which remains attractive to us.
Telkom’s DCF valuation and WACC calculations
2013 2014F 2015F 2016F 2017F 2018F 2019F
EBIT 27,846 29,377 31,106 33,854 37,066 40,683 44,618
Add: Depreciation 4,087 13,547 9,356 10,750 12,743 12,396 13,595
Less: Tax Expense (2,302) (2,403) (2,177) (2,370) (2,595) (2,848) (3,123)
Less: Capex (24,898) (20,000) (23,842) (25,563) (27,423) (29,450) (31,659)
Less: Change in Working Capital (4,207) (1,454) (2,283) (3,556) 1,199 (162) (178)
Free Cash Flow (FCF) 526 19,067 12,160 13,116 20,990 20,619 23,252
Equity Value 2015F WACC Components
Terminal growth, g (%) 3% Debt to Total Capitalization 21.4%
WACC 10.1% Equity to Total Capitalization 78.6%
Cumulative PV of FCFF 189,093 Tax Rate 7.0%
Terminal FCFF 136,179 Cost of Debt 7.0%
Outstanding shares ('mn) 97,101 Risk free rate 7.43%
Target Price 3,350 Market risk premium 3.20%
Beta 0.96
Cost of equity 10.89%
WACC 10.06% Source: Company, PSI Research Est.
Our TP of IDR 3,350 implies P/E of 19.46x with WACC of 10.1% and terminal growth of 3%.
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Peer group valuation comparison
2015F 2016F 2017F 2015F 2016F 2017F 2015F 2016F 2017F 2015F 2016F 2017F 2015F 2016F 2017F15Y 16Y 17Y 15Y 16Y 17Y 15Y 16Y 17Y 15Y 16Y 17Y 15Y 16Y 17Y
PT. Telekomunikasi Indonesia Tbk. TLKM IJ 22.59 19.46 17.57 15.50 3.29 2.88 2.47 1.59 1.69 1.77 22.82 21.89 21.68 2.06 2.28 2.58 IndonesiaPT Indosat Tbk. ISAT IJ 1.73 30.33 21.43 n.a 1.43 1.41 n.a 4.13 3.92 n.a 4.13 6.59 n.a 1.87 2.66 n.aPT XL Axiata Tbk. EXCL IJ 2.85 34.98 20.35 14.48 2.45 2.28 2.16 5.85 5.21 4.74 7.08 10.32 14.28 1.10 2.09 3.03 Mean 28.26 19.78 14.99 2.39 2.19 2.31 3.86 3.61 3.25 11.34 12.93 17.98 1.68 2.34 2.80 Median 30.33 20.35 14.99 2.45 2.28 2.31 4.13 3.92 3.25 7.08 10.32 17.98 1.87 2.28 2.80 SingaporeStarhub Ltd. STH SP 5.27 19.19 18.93 18.04 45.11 37.86 28.84 10.26 10.02 9.49 254.11 219.15 172.15 4.79 4.88 5.09 Singapore Telecommunication Ltd. ST SP 47.86 17.52 16.55 15.33 2.66 2.55 2.44 14.70 14.50 14.00 15.47 15.54 16.07 4.20 4.46 4.84 M1 Ltd. M1 SP 2.58 18.87 17.81 17.25 3.26 3.15 3.11 10.89 10.41 10.11 47.02 47.42 47.69 4.86 5.04 5.35 Mean 18.53 17.76 16.87 17.01 14.52 11.46 11.95 11.64 11.20 105.53 94.04 78.64 4.62 4.79 5.09 Median 18.87 17.81 17.25 3.26 3.15 3.11 10.89 10.41 10.11 47.02 47.42 47.69 4.79 4.88 5.09 MalaysiaTelekom Malaysia Bhd. T MK 7.07 26.39 24.37 21.73 3.40 3.33 3.21 7.66 7.31 6.88 12.74 13.85 14.74 3.50 3.77 4.17 Digi.Com Bhd. DIGI MK 13.20 23.22 22.31 21.18 65.31 32.08 64.64 14.66 13.95 13.22 298.44 304.44 333.89 4.26 4.43 4.63 Maxis Bhd. MAXIS MK 14.45 26.73 25.04 24.02 12.01 12.63 13.49 13.86 13.46 13.10 43.45 50.47 58.55 4.18 4.35 4.43 Mean 25.45 23.91 22.31 26.91 16.01 27.11 12.06 11.57 11.07 118.21 122.92 135.73 3.98 4.18 4.41 Median 26.39 24.37 21.73 12.01 12.63 13.49 13.86 13.46 13.10 43.45 50.47 58.55 4.18 4.35 4.43 Overall industry mean 24.08 20.48 18.06 15.44 10.91 13.63 9.29 8.94 8.51 78.36 76.63 77.45 3.42 3.77 4.10 Overal industry median 26.39 20.35 17.25 3.26 3.15 3.11 10.89 10.41 10.11 43.45 47.42 47.69 4.18 4.35 4.43
ROE (%) Div Yield (%)Company Ticker
Market
Cap (USD
BN)
P/E (x) P/B (x) EV/EBITDA (x)
Source: Bloomberg, PSI Research Est.
SWOT Analysis
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FYE Dec FY2013 FY2014 FY2015F FY2016F FY2017F FYE Dec FY2013 FY2014 FY2015F FY2016F FY2017F
Income Statement (USD Mn) Balance Sheet (USD Mn)
Revenue 82,967 89,696 95,369 102,252 109,692 PPE 86,761 94,809 101,013 107,009 114,029
EBITDA 43,626 46,508 49,128 53,216 58,009 Investment 304 1,767 2,137 3,584 3,942
Depreciation & Amortization 15,780 17,131 18,022 19,362 20,943 Others 7,811 10,557 13,023 15,832 17,062
EBIT 27,846 29,377 31,106 33,854 37,066 Total Non-current Assets 94,876 107,133 116,173 126,425 135,033
Net Finance (Expense) / Income (668) (576) (296) 88 578 Inventories 509 474 605 607 673
Other Items 0 0 0 0 0 Account Receivables 6,026 6,465 6,784 7,379 7,967
Associates & JVs (29) -17 0 0 0 Cash 14,696 17,672 26,138 32,147 45,148
Profit Before Tax 27,149 28,784 30,810 33,943 37,644 Others 11,844 9,151 11,373 12,373 12,468
Taxation (6,859) (7,338) (6,676) (7,158) (7,678) Total Current Assets 33,075 33,762 44,900 52,507 66,256
Profit After Tax 20,290 21,446 24,134 26,785 29,966 Total Assets 127,951 140,895 161,073 178,932 201,288
Non-controlling Interest 6,085 6,808 7,420 8,271 8,987 Short Term Loans 432 1,810 3,500 3,500 3,500
PATMI 14,205 14,638 16,714 18,514 20,979 Account Payables 11,600 11,830 11,736 13,501 12,955
Others 16,405 18,146 19,969 21,731 24,650
Total Current Liabilities 28,437 31,786 35,205 38,732 41,105
FYE Dec FY2013 FY2014 FY2015F FY2016F FY2017F Long Term Loans 14,731 15,743 17,481 17,133 18,762
Per Share Data (USD) Others 7,359 7,241 9,401 10,298 9,608
EPS, reported 146.29 150.75 172.13 190.67 216.05 Total Non-current Liabilities 22,090 22,984 26,882 27,431 28,370
DPS 102.40 60.30 68.85 76.27 86.42 Non Controlling Interest 16,882 18,318 20,320 22,274 28,731
BVPS 699.54 797.36 886.96 1,019.41 1,161.35 Shareholder's Equity 60,542 67,807 78,666 90,494 103,082
FYE Dec FY2013 FY2014 FY2015F FY2016F FY2017F
FYE Dec FY2013 FY2014 FY2015F FY2016F FY2017F Valuation Ratios
Cashflow Statement (USD Mn) P/E (X) 14.70 19.00 19.46 17.57 15.50
CFO P/B (X) 2.70 3.23 3.29 2.88 2.47
Net Income 14,205 14,638 16,714 18,514 20,979 EV/EBITDA (X), adj 1.38 1.47 1.59 1.69 1.77
Adjustments 5,158 6,997 3,033 5,492 361 Dividend Yield (%) 4.76% 2.10% 2.06% 2.28% 2.58%
WC Changes (4,207) (1,454) (2,283) (3,556) 1,199 Growth & Margins
Cash generated from ops 951 5,543 751 1,936 1,560 Growth
Others 0 0 0 0 0 Revenue 0 8.11% 6.32% 7.22% 7.28%
Cashflow from ops 15,156 20,181 17,465 20,450 22,539 EBITDA 0 6.61% 5.63% 8.32% 9.01%
CFI EBIT 0 5.50% 5.89% 8.84% 9.49%
Capex, net 24,898 20,000 23,842 25,563 27,423 Net income 0 3.05% 14.18% 10.77% 13.31%
Others (35,776) (32,019) (32,241) (35,090) (35,739) Margins
Cashflow from investment (10,878) (12,019) (8,399) (9,527) (8,316) EBITDA margin 52.58% 51.85% 51.51% 52.04% 52.88%
CFF EBIT margin 33.56% 32.75% 32.62% 33.11% 33.79%
Share Issuance 0 0 0 0 0 Net Profit Margin 17.12% 16.32% 17.53% 18.11% 19.13%
Loans, net of repayments 1,108 1,012 1,738 (348) 1,629 Key Metrics
Dividends (9,944) (5,855) (6,686) (7,406) (8,392) ROE (%) 23.46% 21.59% 21.25% 20.46% 20.35%
Others 6,130 (343) 4,348 2,840 5,540 ROA (%) 11.10% 10.39% 10.38% 10.35% 10.42%
Cashflow from financing (2,706) (5,186) (599) (4,914) (1,223)
Net change in cash 1,572 2,976 8,466 6,009 13,001 Net Debt/Cash 1.38 1.33 1.06 0.87 0.67
CCE, end 14,690 17,666 26,132 32,141 45,141 Net Gearing (X) 0.26 0.27 0.28 0.25 0.27 Source: Company, PSI Research Est.
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TELEKOMUNIKASI INDONESIA INITIATING COVERAGE
Contact Information (Singapore Research Team) Management Chan Wai Chee (CEO, Research - Special Opportunities)
[email protected] Research Operations Officer Jaelyn Chin [email protected]
Macro | Equities Market Analyst | Equities US Equities Soh Lin Sin [email protected] Kenneth Koh [email protected] Wong Yong Kai [email protected] Bakhteyar Osama
Finance | Offshore Marine Real Estate REITs Benjamin Ong [email protected]
Caroline Tay [email protected] Dehong Tan [email protected]
Telecoms | Technology Transport & Logistics Consumer
Colin Tan [email protected] Richard Leow, CFTe
[email protected] Shane Goh [email protected]
Contact Information (Regional Member Companies) SINGAPORE
Phillip Securities Pte Ltd Raffles City Tower
250, North Bridge Road #06-00 Singapore 179101 Tel +65 6533 6001 Fax +65 6535 6631
Website: www.poems.com.sg
MALAYSIA Phillip Capital Management Sdn Bhd
B-3-6 Block B Level 3 Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450
Kuala Lumpur Tel +603 2162 8841 Fax +603 2166 5099
Website: www.poems.com.my
HONG KONG Phillip Securities (HK) Ltd
11/F United Centre 95 Queensway Hong Kong
Tel +852 2277 6600 Fax +852 2868 5307
Websites: www.phillip.com.hk
JAPAN
Phillip Securities Japan, Ltd. 4-2 Nihonbashi Kabuto-cho Chuo-ku,
Tokyo 103-0026 Tel +81-3 3666 2101 Fax +81-3 3666 6090
Website: www.phillip.co.jp
INDONESIA PT Phillip Securities Indonesia
ANZ Tower Level 23B, Jl Jend Sudirman Kav 33A Jakarta 10220 – Indonesia
Tel +62-21 5790 0800 Fax +62-21 5790 0809
Website: www.phillip.co.id
CHINA Phillip Financial Advisory (Shanghai) Co Ltd
No 550 Yan An East Road, Ocean Tower Unit 2318,
Postal code 200001 Tel +86-21 5169 9200 Fax +86-21 6351 2940
Website: www.phillip.com.cn
THAILAND Phillip Securities (Thailand) Public Co. Ltd
15th Floor, Vorawat Building, 849 Silom Road, Silom, Bangrak,
Bangkok 10500 Thailand Tel +66-2 6351700 / 22680999
Fax +66-2 22680921 Website www.phillip.co.th
FRANCE King & Shaxson Capital Limited
3rd Floor, 35 Rue de la Bienfaisance 75008 Paris France
Tel +33-1 45633100 Fax +33-1 45636017
Website: www.kingandshaxson.com
UNITED KINGDOM King & Shaxson Capital Limited
6th Floor, Candlewick House, 120 Cannon Street, London, EC4N 6AS
Tel +44-20 7426 5950 Fax +44-20 7626 1757
Website: www.kingandshaxson.com
UNITED STATES Phillip Futures Inc
141 W Jackson Blvd Ste 3050 The Chicago Board of Trade Building
Chicago, IL 60604 USA Tel +1-312 356 9000 Fax +1-312 356 9005
Website: www.phillipusa.com
AUSTRALIA Phillip Capital Limited
Level 12, 15 William Street, Melbourne, Victoria 3000, Australia
Tel +61-03 9629 8288 Fax +61-03 9629 8882
Website: www.phillipcapital.com.au
SRI LANKA Asha Phillip Securities Limited
No-10 Prince Alfred Tower, Alfred House Gardens, Colombo 03, Sri Lanka Tel: (94) 11 2429 100 Fax: (94) 11 2429 199
Website: www.ashaphillip.net
INDIA PhillipCapital (India) Private Limited
No.1, 18th Floor Urmi Estate
95, Ganpatrao Kadam Marg Lower Parel West, Mumbai 400-013
Maharashtra, India Tel: +91-22-2300 2999 / Fax: +91-22-2300 2969
Website: www.phillipcapital.in
TURKEY PhillipCapital Menkul Degerler
Dr. Cemil Bengü Cad. Hak Is Merkezi No. 2 Kat. 6A Caglayan 34403 Istanbul, Turkey
Tel: 0212 296 84 84 Fax: 0212 233 69 29
Website: www.phillipcapital.com.tr
DUBAI Phillip Futures DMCC
Member of the Dubai Gold and Commodities Exchange (DGCX)
Unit No 601, Plot No 58, White Crown Bldg, Sheikh Zayed Road, P.O.Box 212291
Dubai-UAE Tel: +971-4-3325052 / Fax: + 971-4-3328895
Website: www.phillipcapital.in
Page | 14 | PHILLIP SECURITIES INDONESIA
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