reports
- Chris Hoare
Telkom Indonesia (Buy, IDR 4,500, +76%) Q4 24 Quick Take: Buybac...
Against weak comps, trends improved, but fundamentally the picture remains challenged. The announced share buyback (IDR 3trn, 1.2% of outstanding) is welcome but probably won’t on its own be sufficient to turn the picture around. PT Telkom has disappointed with headwinds outside of Java and in Indihome. We remain Buyers on valuation but there is little in the trends here to suggest an operational turnaround is close.
- Chris Hoare
- 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
Indonesian Telcos Q3 23 review: IndiHome/Telkomsel merger sparking in...
Following several weaker quarters, Q3 marked something of a turnaround for Telekom Indonesia with stronger net adds on both mobile and broadband side. It would appear that the closing of the IndiHome/Telkomsel merger in July has catalysed better performance. With market repair continuing and Enterprise also better, we think the stock should start to perform better and remain Buyers.
- Chris Hoare
- David Lopes
Indonesia Telcos & Towers – Feedback from Meetings in Jakarta
We came away reaffirmed on the positive outlook for mobile market repair but remain cautious on the competitive dynamics in the broadband space. H2 should be significantly better than a (weak) H1, and Telkom remains our preferred pick in the medium term.
- Chris Hoare
- David Lopes
Indonesian Telcos Q2 23 review: Market repair story gaining momentum
The Indonesian mobile market repair story is gaining pace as ARPU growth improved to +9.7% YoY. Mobile service revenue continue to trend in the mid-single digit range; EBITDA growth also improved for all three operators. As a result, Indosat upgraded its EBITDA margin guide to mid-high 40% (from mid 40%) while XL upgraded topline growth to high single digit (from MSD-HSD).
- Chris Hoare
Indonesian Telcos Q1 23 review: Encouraging mobile outlook
Indonesian telcos saw another round of ARPU improvement, which drove mobile service revenue up by 4.6% YoY. Going into Q2, we expect further improvements given the price increases by XL and Indosat at end of Q1. EBITDA trend remains ahead of MSR growth; we believe Indosat and XL’s FY23 margin guidance appear conservative – mid-40% and 49% EBITDA margin respectively.
- Chris Hoare
Telkom Indonesia (Buy, IDR: 6,000, +41%) Q1 23: Thoughts after the ca...
Telekom Indonesia reported a slower start to FY23 last week. From today’s call, management retained their FY23 guidance (MSD revenue growth), expecting acceleration in 2H whilst attributing Q1’s lower margin to higher spectrum cost and provisions related to corporate initiatives.
- Chris Hoare
PT Telkom (Buy, IDR: 6,000, +41%) Telkomsel-Indihome merger: Our Take
Telkomsel will integrate PT Telkom’s Indihome for IDR 58.3tn (USD 3.9bn) through the issuance of new Telkomsel shares, with target completion by 3Q 2023. Post the integration and exercise of pre-emptive rights by Singtel, Singtel’s shareholding is expected to be diluted from 35% to 30.1%, with PT Telkom at 69.9%. Our thoughts below.
- Chris Hoare
- David Lopes
Indonesian Telcos Q4 22 review: Sustained growth, stay positive on Mo...
Indonesian telcos reported sustained ARPU growth in Q4, which drove mobile service revenue by 4.3% YoY. The series of price increases by all three, with the latest from XL bode well for Indonesian Mobile. EBITDA also improved in Q4 which makes Indosat and XL’s FY23 margin guidance appear conservative – mid-40% and 49% EBITDA margin respectively.
- Chris Hoare
- David Lopes
New Street: EM Telcos Q3 22 Enterprise review: Onboard the Enterprise...
Enterprise remains as the fastest driver for most EM Telcos and is set to exceed expectations based on our view that Enterprise penetration is following an S-curve. For nascent markets (India, Latam, Thailand), acceleration is the theme; while more mature markets like China are still riding on the double-digit trend. We see China as the leading indicator as to how Enterprise revenue might trend for EM telcos. In this note, we pull together actual Enterprise revenue trends as reported by EM Telco...
- Chris Hoare
- David Lopes
- Chris Hoare
- David Lopes
New Street: EM Telcos Alongside better growth, ROIC is trending highe...
We have written on multiple occasions about the new secular growth drivers that are leading EM Telcos to outpace GDP growth (Enterprise, Broadband, Fintech). But this is only part of why we are so bullish on the space. ROIC has also inflected. Partly this is itself a function of better growth, but with consolidation in the core mobility business, telcos are also seeing opex and capex structurally fall as a % of sales, while spectrum costs are also falling. Thus, leading EM Telcos are structurall...
- Chris Hoare
New Street: EM Telcos Growth stays strong in Q2, despite fears over i...
Despite fears that EM ARPUs would be impacted by rising food and energy prices (which we always felt were overdone), growth in Q2 remained strong for the leading telcos we track. In fact, with Brazil the latest market to see growth improve (albeit remaining below local inflation), Q2 represented another quarter where a simple average of growth was above 10%. Our thesis remains that EM telcos are set to grow sustainably at GDP+ rates.
- Chris Hoare
- Chris Hoare
- Chris Hoare
- David Lopes
- Chris Hoare
- Chris Hoare
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