Seeing TLKM Stock Prospects

ILLUSTRATION. Ellen May, Capital Market Observer and founder of the Ellen May Institute. Photo: PRIVATE DOC

Reporter: Daily Cash | Editor: Harris Hadinata

KONTAN.CO.ID – JAKARTA. The share price of PT Telekomunikasi Indonesia Tbk (TLKM) since April has been stagnant. In fact, since June, this stock has tended to decline in price.

TLKM’s share price has contracted 56.83% from its highest price of Rp. 4,030 on January 13, 2020. TLKM’s sluggish movement has invited many questions from retail investors.

TLKM’s revenue in the first semester was Rp 66.9 trillion, down 3.6% YoY. This decline was driven by a 27.5% YoY decline in the SMS and telephone segments.

On the other hand, the data, internet, technology services segments increased by 6.8% YoY in the same period. Segment fixed broadband (IndiHome) also jumped 19.1% YoY in the first half of 2020.

Telkomsel, as a data product for TLKM, recorded a 13.5% increase in digital business to Rp 31.9 trillion. Average revenue from subscribers (ARPU) increased from Rp 45,000 per customer to Rp 46,000 per customer.

Telkomsel’s data usage increased 43% in the first semester to 7,037 MB. In addition, Telkomsel’s data traffic also increased 40% to 4,156 PB.

IndiHome experienced a 19% growth in the first half of 2020. The number of IndiHome subscribers also grew 24.2% to 7.45 million subscribers.

IndiHome as fixed broadband has reached 496 out of 514 cities and districts. IndiHome’s position is still very strong in its segment, compared to competitors such as XL Home, which only reaches 27 cities and districts.

Telkomsel also sells towers to Mitratel. The total number of towers is 6,050, valued at Rp. 10.3 trillion. This fund becomes the capital for TLKM to focus on developing its main business, namely digital telecommunications.

TLKM shares are still interesting to collect. Investors can buy in the range of IDR 2,550-IDR 2,700. There is potential upside 27% to 60%.

TLKM is still strong as leader in the telecommunications sector. We believe TLKM is still prospective in the future, because the need for the internet will continue to grow.

Since 2015 active internet users in Indonesia have grown with an average growth rate (CAGR) of 19.3% per year. This has the potential for TLKM to gain greater revenue from the data and internet segments.

Currently, the data and internet segments have contributed 68% of TLKM’s total revenue. This contribution will continue to grow, as TLKM starts to leave the SMS and telephone segments, to focus on the internet.

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