Good performance, take a peek at the Sarana Menara (TOWR) stock recommendation from Samuel Sekuritas

Reporter: Aerospace Wisdom | Editor: Anna Suci Perwitasari

KONTAN.CO.ID – JAKARTA. PT Sarana Menara Nusantara Tbk (TOWR) recorded a smooth performance in the third quarter of 2021. It was noted that TOWR managed to pocket revenue of Rp 2.1 trillion, aka an increase of 4% on a quarterly basis.

With this acquisition, TOWR’s cumulative revenue until the end of September 2021 reached Rp 6.1 trillion. This number rose 9.2% on a year on year (yoy).

From the side bottom line, The performance of this tower issuer was also recorded well after it managed to book a net profit of Rp 2.58 trillion by the end of the third quarter of 2021. This revenue grew by 29.93% compared to net profit in September 2020 which amounted to Rp. 1.99 trillion.

Samuel Sekuritas analyst Joshua Zisokhi said the TOWR’s performance was in line with Samuel Sekuritas’ projections. Because, performance top line and bottom line The Djarum group listed companies have met 73.7% and 78.4% of their estimates, respectively.

Also Read: The acquisition has a positive impact, analysts recommend buying TOWR shares

Yosua assessed that TOWR’s performance was helped by the addition of 266 new towers (1.2% yoy) which brought its total tower portfolio to 21,639 towers.

It also makes the amount tenant Sarana Menara Nusantara also increased by 1,841 tenants, up 4.8% yoy to 40,456. This makes tenancy ratio TOWR reached 1.87 times. Not only that, TOWR’s fiber optic network also increased 82.5% to 59,600 km.

“TOWR’s performance is also supported by its healthy financial condition, which is reflected in the decrease in its net debt/EBITDA ratio from 2.4 times at the end of September 2020 to 2.1 times at the end of September 2021. Improvements also occurred in interest coverage which became 7.9 times from the previous 6.5 times,” wrote Joshua in his research on November 29.

At the beginning of last October, TOWR also officially acquired a 94.0% stake in PT Solusi Tunas Pratama Tbk (SUPR) worth IDR 16.7 trillion.

After this acquisition, the number of TOWR towers will increase to approximately 28,049 towers with tenancy ratio reached 1.89 times, competing with Mitratel to become the largest telecommunications tower company in Indonesia.

Yosua said the SUPR acquisition would also increase the length of the TOWR fiber optic network to 75,000 km and bring in additional long-term contracts worth Rp 10.1 trillion. Meanwhile, as of the end of last September, TOWR’s long-term contract amounted to Rp 52 trillion.

“However, because the SUPR acquisition was carried out with loan funds, TOWR’s pro-forma net debt/EBITDA ratio will increase from 2.1 times to 5.5 times,” added Yosua.

Along with TOWR’s performance which is in line with Samuel Sekuritas’ target, Joshua also maintains a buy recommendation for TOWR shares with a target price of Rp 1,600 per share reflecting 13.9 times EV/EBITDA in 2022.