TLKM - Touted to expand digital business capabilities

TLKM - Touted to expand digital business capabilities Telekomunikasi Indonesia (TLKM) is eyeing to expand its capabilities and competence in digital business, including digital connectivity, platform and services through 3 strategies namely build, borrow and buy. Furthermore, the company is planning to push further partnerships in order to improve business sustainability, especially with Singtel as one of major shareholder, especially for FMC and data center business to sharpen its focus on B2B segment. (Source: PasarDana) Comment: As an agent of change, it is reasonable for TLKM to continuously improve its capabilities beyond mobile segment, while tapping into new product, such as data center. Although it requires huge investment, this strategy should bring benefits in the form of value of potential synergy, business diversification while strengthening its leadership in telecommunications. We maintain our BUY call with a target price of IDR4,420/share, implying at 5.6x '23 EV/EBITDA.