These three telecommunication stocks are recommended to buy

ILLUSTRATION. Telecommunication issuers have released their performance from January to September 2020.

Reporter: Kenia Intan | Editor: Wahyu T. Rahmawati

KONTAN.CO.ID – JAKARTA. Telecommunication issuers have released their performance from January to September 2020. The three issuers are PT Indosat Tbk (ISAT), PT XL Axiata Tbk (EXCL), and PT Telekomunikasi Indonesia Tbk (TLKM).

Quoting Kontan.co.id’s records, ISAT’s highest revenue gain was 9.2% compared to the previous year, to IDR 20.6 trillion. After that, it was followed by EXCL up to 5% yoy to Rp 19.66 trillion.

Meanwhile, TLKM posted a revenue correction of 2.62% yoy until the third quarter of 2020. The realization was Rp 99.94 trillion, down from the previous Rp 102.63 trillion.

Even though it recorded a correction, TLKM’s net profit was still able to grow 1.34% yoy to Rp 16.68 trillion. Precisely bottom line The deep depressed ISAT. It is recorded that ISAT has suffered a net loss of up to Rp 457.5 billion as of the third quarter of 2020. This number has increased by 60.75% from the same period the previous year which reached Rp 284.6 billion.

Meanwhile, EXCL recorded significant profit growth of up to 316.33% yoy to Rp 2.08 trillion.

Also Read: Positive performance, Mirae Asset reviews Indonesia’s Telecommunications (TLKM) recommendations

Seeing the performance until the third quarter of 2020, Samuel Sekuritas Indonesia analyst Selvi Octaviani assessed that the performance of TLKM and EXCL is still attractive. During the first nine months of 2020 TLKM did record revenue corrections. According to Selvi, this decline in income was due to pressures that occurred in the second quarter of 2020.

Just so you know, in the second quarter of 2020 TLKM posted revenue of Rp 32.66 trillion. This number decreased by 5.3% yoy and 4.5% quarterly.

“The number of Telkomsel subscribers also fell to 160 million and segment revenue enterprise down due to the PSBB policy, “said Selvi, Thursday (5/11). Meanwhile, in the third quarter of 2020, this condition began to improve, the number of subscribers again increased to 170 million subscribers.

Also Read: This is the contribution of Telkom Indonesia (TLKM) revenue until the third quarter of 2020

On the other hand, TLKM’s revenue was recorded to grow in the third quarter of 2020. The realization was Rp 33.8 trillion or an increase of 1.3% quarter on quarter (qoq). “Supported by Indihome’s revenue growth of Rp 5.74 trillion,” added Selvi. This figure was up 17.2% yoy and 8.5% qoq.

The increased revenue also raised its net profit to Rp 5.69 trillion or an increase of 5.7% yoy and 11% qoq. TLKM’s net profit margin reached 17.2%, growing from the position in the second quarter of 2020 which amounted to 15.7%.

Meanwhile for EXCL, its performance until the third quarter of 2020 has indeed grown well in terms of top line nor bottom line. However, its revenue in the third quarter of 2020 actually decreased slightly by 0.2% qoq, from the previous Rp 6.58 trillion in the second quarter of 2020 to Rp 6.57 trillion in the third quarter of 2020.

Even so, the net profit was still able to increase significantly by 48.1% qoq. According to Selvi, this increase was supported by the success of cost efficiency, so that the operating profit margin increased to 16.2% from the previous 12.3% in the second quarter of 2020. The net profit margin increased to 5% from 3.4% in the second quarter of 2020.

Also Read: Selling the tower, XL Axiata (EXCL) net profit reached Rp 2.07 trillion in the third quarter