TLKM - Cost-optimization unlocks profit potential

KBVS Update
Tuesday, 23 July 2024

TLKM - Cost-optimization unlocks profit potential
(Reiterate BUY - TP: IDR4,000)

Accelerates Five Bold Moves with new subsidiaries. TLKM's Five Bold Moves strategy is advancing with the establishment of PT Infrastruktur Telekomunikasi Indonesia in Dec-23 for network optimization and PT Telkom Data Ekosistem in 1Q24 for data center consolidation. These initiatives are designed to enhance profitability by reducing costs and improving operational efficiency.

Integration drives efficiency. Cost optimization from the Telkomsel-IndiHome integration is expected to limit total expense growth to just 2.7% yoy in FY24, down from 12.6% yoy in FY22.

Maintained FY24 revenue forecast. Following inline 1Q24 results that met ours and consensus’, we maintained our FY24 revenue forecast at IDR154.94 tn (+3.8% yoy). EBITDA is projected at IDR80.76 tn (+4.1% yoy).

Reiterate BUY with TP of IDR4,000, based on 4.9x 2024F EV/EBITDA (-1SD of 7yrs-historical mean).

Regards,
Steven Gunawan - KBVS Research