Mar 07, 2016 09:06:53
Telekomunikasi Indonesia ($TLKM): Upgrade TP after strong 4Q15 results

Revise up EBITDA forecast in FY16/17. We revise up o Revise up EBITDA forecast in FY16/17. ur FY16 and FY17 EBITDA forecasts by 11% to Rp53tn and Rp55tn, respectively, on better overall top-line growth and relatively stable profitability. Our new revenue forecasts are 13% and 14% higher than the previous forecasts on a better outlook for the data segments (under Telkomsel), driven by stable data pricing and better subscribers growth.

4Q15 results reflect Telkomsel’s 4Q15 results reflect Telkomsel’ssupremacy in Indonesia supremacy in Indonesia cellular segments. We are more confident about TLKM cellular segments earnings outlook, as we believe Telkomsel will continue benefit from a more stable industry that was reflected in its 4Q15 performance. TLKM booked Rp14.3tn (+16% y-o-y, +6% q-oq) EBITDA in 4Q15, beating our expectation but in line with consensus. 4Q15 EBITDA margin hit 53.6%, the highest level in 2015.

Strong balance sheet. We also like TLKM for its str Strong balance sheet. ong balance sheet and zero exposure to foreign exchange rate fluctuations, unlike its smaller peers. This gives TLKM financial flexibility to maintain its growth momentum or keep paying dividends (with attractive yields of 4%).