Telkom (TLKM.IJ,
BUY) - Stronger Grip on High-Growth Path
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Telkom reported 19% YoY profit
growth to IDR10,013b in 9M12, on the back of an 8% YoY revenue growth to
IDR56,8654b.The result is above our expectations. While revenue increased
strongly, operating expenses were up by only 4% YoY, to IDR38,110b. As such,
EBIT was up by 17% YoY to IDR19,303b while EBITDA increased 10% YoY to
IDR29,921b.
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Telkom will continue to show
strong growth in data revenue supported by increasing availability of affordable
smart phones and an improving 3G network. In 9M12, the number of broadband users
rose 43% YoY to 15.9m. As broadband penetration is still low at only 4%
currently, we believe there is much upside potential. Telkom estimates broadband
penetration will increase to ~15% in the next three years.
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Telkom plans to increase capital
expenditure to ~25% of revenue in the next two years, from 22% at the moment. At
the same time, the company declares that it will not spend anything on Telkom
Flexi, its CDMA‐based
limited mobility product. BUY.
After revising our forecasts upward, we increase our TP to IDR11,000
as we peg the stock at 16.5x FY13F PER (5.3x FY13F
EV/EBITDA).
source: KIMENG dated 30 October 2012
