TLKM - To kick start Batam DC commercialization in 1Q25

TLKM - To kick start Batam DC commercialization in 1Q25 Telekomunikasi Indonesia (TLKM) expects that commercialization of its hyperscale data center located in Batam, NeutraDC to be kicked off by 1Q25. The data center will be aimed at primarily catering growing demand from Singapore that previously imposed temporary moratorium on data center construction due to limited land plots. The company is sanguine with its data center business, having eyed a 55MW of IT load capacity this year that will be contributed by Cikarang DC as well as micro-edge DC. (Source: Bisnis Indonesia) Comment: We are bullish on TLKM's DC business thanks to Indonesia's low penetration as well as continued growth from neighbouring Singapore that is projected to grow at 3.5% CAGR rate, as well as other ASIAN countries. TLKM's strong positioning as one of the largest Asia's telco group should enable it to unlock its technological advantage. Indonesia’s demand for data center is projected to skyrocket by eight-times from IDR632 tn in 2020 to IDR4,531 tn by 2030, in line with contribution to the country's GDP from 4% to 18%. We maintain our BUY call with a target price of IDR4,650 per share.