Friday, August 3, 2012

TLKM


Telkom (TLKM.IJ, BUY) - Gaining Traction

         Telkom reported a 1H12 net profit of IDR6,428b, up 8% YoY, slightly above our expectations. Telkomsel recorded 10.2m net adds and a market share of 45% from 43% in 1Q12, while Indosat and XL Axiata, recorded negative net adds 
         The new board of directors appointed in May 2012 is focusing on developing broadband infrastructure and services, and accelerating the rollout of the 3G network.  It will concentrate on getting strong partners in each of the IME (Internet, Media Edutainment) sectors before making aggressive investments.  This will be a refreshing change from the previous regime, which at times seemed to lack focus and tended to invest in unprofitable, small or premature lines of business. 
         Rolling over Telkom’s valuation multiples to FY13, we arrive at a TP of IDR10,300 (pegging the stock at 16.6x FY13F PER).  We retain our BUY recommendation.  


Source: KIMENG dated 3 August 2012