20151126-Maybank_KERPL-Best_positioned_16页_1mb

报告摘要

Telekomunikasi Indonesia (TLKM IJ) Summary

Core Content and Key Information

Share Price: IDR2,900
Target Price: IDR3,500 (+21%)
Market Capitalization (USD): $21.4B
Average Daily Trading Volume (USD): $14M
Major Shareholder: Government (52.6%)
Recommendation: BUY (unchanged)

Main Points

Best Positioned for Growth

TLKM is maintaining a BUY rating with an updated target price of IDR3,500 based on FY16 DCF valuation.
TLKM's valuation at 6.4x FY16 EV/EBITDA is slightly below the regional average of 6.8x, indicating potential for further upside.
TLKM has the lowest net debt among peers, enabling rapid capital expenditure and sustaining its market leadership.
Expansion into non-cellular businesses, such as Indi Home and T-Cash, is strengthening its growth trajectory.

Easing Competition and Price Rationalization

Competition in the sector has eased, allowing for more rational pricing policies.
TLKM has maintained its No.1 position due to its cluster-based pricing strategy and widest network coverage.
ARPU growth has been positive, with TLKM's cellular ARPU growing by 10.3% YoY (vs. 11.1% QoQ), outperforming the sector.
EBITDA margin is expected to improve and reach around 50% in FY16-17F, driven by higher ARPU and reduced churn.

Data Traffic Growth

Data traffic is expected to continue surging, with TLKM's growth rate significantly outpacing the sector.
Data consumption per subscriber has reached nearly 600Mb, and is projected to exceed 1GB/month in FY17F.
4G LTE is expected to provide more upside for data payload, but most 2016 network rollouts will remain on 3G.
TLKM's data market share remains stable at around 50%.

Voice and SMS Performance

Voice revenue continues to grow, driven by cluster-based pricing and higher MoU.
SMS usage has decelerated by 14% YoY, but revenue growth is supported by higher tariffs.
Data cannibalization on SMS is expected to continue, with volume likely to fall by 10% pa in FY16-17F.

Fiberizing Growth: Indi Home & T-Cash

Indi Home has reached 680k new subscribers since its launch in early 2015, with 6m homes passed.
T-Cash is expanding into e-payment services, leveraging Telkomsel's 57.4% market share.
T-Cash Tap is an NFC-based system that allows cashless payments via mobile phones, targeting both urban and traditional merchants.
T-Cash is expected to provide revenue diversification, subscriber loyalty, and cost reduction in the long run.

Share Price Performance

TLKM's share price has been lagging the sector and underperforming the JCI by 3.1% YTD.
Positive momentum in the sector is expected to continue, and the price lag presents an opportunity for growth.
The target price of IDR3,500 is based on a DCF valuation and reflects 6.4x EV/EBITDA for FY16, which is 1 SD above historical mean.

Financial Highlights

Revenue growth is expected to remain strong, with 12% pa growth anticipated for FY16-17.
EBITDA margin is expected to gradually improve and hover around 50% in FY16-17.
Free cash flow is projected to increase, with FY17F reaching IDR12,471.8B.
Net debt/equity is expected to decline to 3.3% in FY17, reflecting a strong capital structure.

Key Metrics Overview

Metric	FY13A	FY14A	FY15E	FY16E	FY17E
Revenue (IDR b)	82,967.0	89,696.0	100,714.2	112,736.4	126,077.0
EBITDA (IDR b)	41,086.0	44,965.0	49,732.4	56,369.0	63,129.8
Core Net Profit (IDR b)	14,205.0	14,638.0	15,383.8	17,280.3	19,796.5
Core EPS (IDR)	141	145	153	171	196
Core EPS Growth (%)	10.5	3.0	5.1	12.3	14.6
Net DPS (IDR)	83	99	87	92	103
Net Dividend Yield (%)	2.9	3.4	3.0	3.2	3.5
EV/EBITDA (x)	5.7	7.0	6.4	5.7	5.1
Net Debt/Equity (%)	1.0	8.5	7.7	7.6	3.3

Strategic Outlook

TLKM's strong capital structure and low gearing provide a competitive edge in funding network expansion.
The re-farming of 4G LTE is expected to require investment, but TLKM's ability to fund such initiatives is stronger than its peers.
Non-cellular expansion and data monetization are key drivers of future growth.
T-Cash and Indi Home are expected to significantly contribute to revenue diversification and growth.

Conclusion

TLKM is well-positioned to benefit from easing competition, data traffic growth, and expansion into digital services. Its low net debt, strong capital structure, and market leadership support its ability to sustain growth and capitalize on new opportunities. Despite current share price lag, the target price of IDR3,500 reflects its strong fundamentals and potential for further upside.

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