reports
- Chris Hoare
- Chris Hoare
- Soomit Datta
VIVT3 (Buy, TP: BRL61, +23%) Vivo - Solid underlying Q1s – headline E...
Underlying Q1 trends remained robust at Vivo, with revenue in-line (+7% y/y growth) and headline EBITDA missing (1.5%) only due to other items in the cost base (gains/sales) fluctuating. Excluding this and underlying EBITDA of +9% y/y was steady on Q4, and comparable to TIM’s +10% (reported yesterday). Vivo’s mobile service revenue was the strongest in Brazil vs peers, offset slightly by lower fixed growth (the more volatile data/IT business slowing this quarter).
- Soomit Datta
TIMS3 (Buy, TP: BRL23, +24%) TIM Brasil - Solid Q1s, trending ahead o...
TIM reported solid Q1 24 earnings overnight, coming in a shade of ahead of estimates (1% at EBITDA). Service revenue growth remains robust at >7% y/y, with some seasonality potentially impacting Q1 pre-pay revenue; EBITDA of +10% y/y and EBITDAaL +20% y/y is also very strong (and well ahead of 4% inflation), the latter enjoying historic lease reductions (though these are now sequentially stabilising). Q1 trends are tracking a touch above FY guide, potentially enabling further earnings uplift.
- Chris Hoare
Indonesian Telcos Q4 23 review: Strong execution from XL and Indosat;...
Despite Telkom being hit by a series of one-offs in Q4, industry mobile revenue and ARPU trends are still reflective of the benign competitive landscape. EBITDA also improved for both XL and Indosat, with capex intensity improved across the board. Moreover, recent news flow suggests that the XL and Smartfren merger is closer than before. Finally, we also raised our price target for Indosat to IDR12.5k from IDR11k as we layer on higher broadband revenue as it vies for share in the fixed industry.
- Chris Hoare
- Chris Hoare
- Chris Hoare
Thai Telcos Q4 23 review: Turning the corner as ARPU grew after more ...
Thai operators witnessed a notable uptick in growth as industry mobile ARPU reverted to growth after more than three years. EBITDA also bounced higher led by TRUE, setting the stage for 9-11% growth in FY24. Guided capex also suggests moderating capex intensity which is key driver of ROIC upside. The outlook is turning more optimistic than before, validated by our recent visit of the two telcos.
- Chris Hoare
- Chris Hoare
- Chris Hoare
African Telcos Deep dive on Fintech valuations; stay Bullish on AAF a...
We deep dive on African Telco’s Fintech valuations in this note which is a follow up of our higher-level note Show me the (Mobile) Money. African Telcos are becoming more active about unlocking value from Mobile Money (MoMo) with MTN’s recent deal with Mastercard and now rumours that AAF is looking to IPO its MoMo business. Global Fintech/Payments multiples have derated over the past couple of years, but we continue to see great value in the African Telco’s MoMo assets which remain one the key n...
- Chris Hoare
Thai Telcos Takeaways from Meetings with the Thai Telcos in Bangkok
Our meetings with the two Thai operators (& NBTC) validate our view of a benign mobile dynamic, supported by improving tourism, and sharp capex reductions. Both operators remain focused on profitable growth. TRUE seems very confident on synergy delivery.
- James Ratzer
Telecom Italia (Buy, €0.35, +58%) Piecing together the puzzle post-CMD
We recently attended the Telecom Italia CMD in person and the management dinner afterwards. Given the stock fell by 20%+, it’s fair to say the event didn’t quite go as initially planned. In this note we review the situation now the dust has settled a bit, and now we feel we have better visibility on the key drivers behind the operational forecasts and the below-the-line cash items.
- Soomit Datta
TIMS3 (Buy, TP: BRL23, +27%) TIM B - Improving cash returns, though t...
TIM Brasil updated on its cash return policy today, targeting ~BRL12 billion of shareholder returns from 2024-26. This is a strongly improving trend (BRL2.9 billion for 2023), annualizing out at a 9% yield in Brazil (where headline interest rates are falling sharply) and we see this as very supportive for the equity when combined with the strong fundamentals. At the same time, TIM will remain net cash (ex leases) over this forecast period and we see a bigger day of reckoning coming for the Brazi...
- James Ratzer
- Chris Hoare
- David Lopes
Indian Mobile Q3 FY24 review: Still tracking well even without tariff...
India’s telecom industry continue to grow in the HSD, with Bharti and Jio improving at the expense of VIL. Industry ARPU tracked MSD again even without any meaningful tariff hikes; we expect increases to be put through in 2H CY24 though that has largely been priced in. EBITDA continue to trend ahead of topline, with YoY margins improvement across the board. Earlier last month, the government also approved the auction for 10,523 MHz of spectrum which starts from INR 963bn (USD 11.6bn). However, w...
- Chris Hoare
Bharti Airtel (Buy, TP: INR 1,500, +34%) Marginal margin continuing t...
Following a very strong H2 2023, Bharti has retraced nearly INR 100/share. We remain bullish and would see the sell-down as a buying opportunity. Consensus forecasts continue to look too low to us; in this note we focus on the consumer margin, which we think is likely to surprise to the upside.
- James Ratzer
- James Ratzer
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