november 13, 2015 indosat - trimegah...2015/11/12 · indosat 57.5 2.5 10.0 20.0 10.0 15.0 xl...

COMPANY FOCUS PT Trimegah Securities Tbk - www.trimegah.com 1

Indosat Better and Profitable

Paula Ruth

([email protected])

Profitability turnaround

We expect a turnaround in core profitability in 2016, driven by higher

EBITDA but lower D&A (smaller capex post-modernization), lower net

interest expense (due to lower net debt), and also no more additional

finance cost (premium to redeem USD 650mn bond in 3Q15E) compared

to expected core loss in 2015E. Our 2016E core profit is still below con-

sensus by -17%. For EBITDA, we assume EBITDA margin of 43/42% in

2015E/16E. There could be further upside if ISAT can maintain its 3Q15

EBITDA margin at 46%. ISAT achieved positive core bottom line for two

quarters in a row with 3Q15 core profit substantially jumped to Rp116bn

(vs. 2Q15 Rp11bn), supported also by flat D&A and higher tax benefit

rate that quarter.

More manageable forex impact

Last July, the company already called its USD 650mn bond (due 2020)

financed through USD revolving loan (USD 500mn) and IDR loan. USD

debt portion to total debt (excluding obligation to finance lease) was

~33% in 9M15 (vs. 1H15 55%) of total debt. We think this put ISAT at

no. 2 of lowest USD debt portion among Big 3 (Telkomsel ~11% in

9M15; EXCL ~50% in Oct 2015). We still assume 2015E USD debt por-

tion at ~32%. We have not included possible 2nd tower sales in our

forecast.

Monetization of better network

Not only ISAT is energized from positive industry momentums (rising

data price and subscriber’s large appetite for data service), the company

is beginning to monetize more from its upgraded network (more 3G +

4G-ready BTS). Its 3G capability already reached ~49% of its network

(total BTS) from only ~21% in 2012 just before modernization started.

Valuation: Buy with TP Rp5,400

Our DCF-based TP used 9.9% WACC, 1.0 Beta, and 3.0x EV/EBITDA

terminal value. Current price implied 2016-17 EV/EBITDA of 3.1-3.0x.

We expect ROIC improvement momentum in 2017-18E. If we assume

the company sold 1K towers by the beginning of next year, ISAT would

trade at 2016E EV/EBITDA of 3.0x (please see page 13 for assumption

details).

PT Indosat Tbk is a telecommunication

and information service provider in Indo-

nesia that provides cellular services

(prepaid and postpaid), fixed data ser-

vices or MIDI (Multimedia, Internet &

Data Communication) and fixed voice

services including fixed wireless access

services.

Share Price Rp4,745

Sector Telecommunications

Price Target Rp5,400(14%)

Year end Dec 2014 2015F 2016F 2017F 2018F

Sales 24,085 26,505 28,074 29,210 30,397

EBITDA 10,059 11,337 11,925 12,284 12,655

Net Profit (1,987) (1,590) 1,112 1,536 1,880

EPS (366) (293) 205 283 346

Core Profit (542) (116) 1,006 1,430 1,774

Core EPS (Rp) (100) (21) 185 263 327

Core EPS Growth (%) NM NM NM 42% 24%

DPS (Rp) (183) (146) 102 141 173

BVPS (Rp) 2,506 2,307 2,658 2,838 3,043

EV/EBITDA (x) 3.7 3.3 3.1 3.0 2.9

Core P/E (x) NM NM 25.6 18.0 14.5

Div Yield (%) NM NM 2.2% 3.0% 3.6%

BUY Rp5,400

Reuters Code ISAT.JK

Bloomberg Code ISAT.IJ

Issued Shares 5,434

Mkt Cap. (Rpbn) 26,164

Avg. Value Daily 6 Month (Rpbn)

2.3

52-Wk range 4855 / 3050

Qoredoo Asia Pte. Ltd. 65.0%

Others 19.7%

Public 15.3%

EBITDA 16F 17F

Consensus (Rp bn) 11,896 12,550

TRIM vs Cons. (%) 0.2 -2.1

Company Update

Stock Data

Major Shareholders

Consensus

Companies Data

November 13, 2015

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Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15

(Rpmn)Avg. 5 Day MA Trading Value (RHS) Price (LHS)

Stock Data Stock Data Stock Price

PT Trimegah Securities Tbk - www.trimegah.com SECTOR FOCUS 2

Figure 1. Porter’s five competitive forces analysis

Source: TRIM Research

Healthier competitive rivalry among telco players

Currently, there are ~5 telco operators in the industry, down from previously ~10 players in 2009, implying that

the industry has entered consolidation phase from previously unhealthy price war during 2008-12. Hence, we

think there will be less price war in the industry supporting the industry player’s effort to achieve better moneti-

zation of their network (more likely to increase ARPU). As smartphone adoption (~14% in 2013) keep increasing,

we think there is higher risk of substitution to data service rather than voice and SMS service. Hence, operators

might tend to increase voice and SMS price to balance the decline in voice and SMS traffic.


Figure 3. Current marketing positioning of GSM operators


Telkomsel Indosat XL Three

Postpaid brand (high end customers) Halo Matrix XL Tri

Quality brand (medium to high end customers) Simpati Mentari XL Tri

Fighting brand (low to medium end customers) As IM3 Axis Tri

Figure 2. Timeline of Indonesia’s telco industry’s competitive phases



Growing usage of data service from increasing smartphone penetration

As mobile subscribers’ penetration rate in Indonesia already reached 125%, we think there won’t be a significant

increase in the total number of subscribers in the industry. However, we think there’s still potential upside of fur-

ther growth for the cellular business from the growing data usage on the back of growing smartphone adoption

in Indonesia. This is also implied from 3G penetration rate in Indonesia which was still at 45%, significantly be-

low the mobile subscribers’ penetration rate, considering that most of mobile subscribers in Indonesia still use

feature phone (only 2G; voice and SMS). It is expected that smartphone penetration in Indonesia to reach 38%

in 2017E from 14% in 2013.

Source: World Bank, ITU, TRIM Research

Figure 4. Mobile Subscribers Penetration in ASEAN, China, and India (2013)

Figure 5. A snapshot of mobile subscribes and usage in Indonesia

Source: Internet live stats, Internet world stats, www.techinasia.com, companies’ data, TRIM Research


Figure 7. Social network users in Indonesia(in

millions)

Source: statista.com, World Bank, TRIM Research

Figure 8. Number of Internet Users in Indonesia

Source: Euromonitor, World Bank, TRIM Research Source: statista.com

Figure 9. Average mobile app download rate per

capita

Figure 6. Indonesia’s smartphone penetration

Source: Statista.com, TRIM Research

Figure 10. Spectrum allocation

Source: Indosat, Telkom, XL, and TRIM Research

Total 850 Mhz 900 Mhz 1800 Mhz 2100 Mhz 2300 Mhz

Telkomsel 65.0 5.0 7.5 22.5 15.0 15.0

Indosat 57.5 2.5 10.0 20.0 10.0 15.0

XL Axiata 45.0 - 7.5 22.5 15.0 -

Hutchison Three 20.0 - - 10.0 10.0 -

Spectrum allocation—resource for competitiveness

As 900Mhz already set as technology neutral, ISAT allocated its 10Mhz bandwidth on that band for 3G and 2G

service through its network modernization project (finished last July). Although 1800Mhz band should be ready

for LTE after refarmed (scheduled to finish on November 2015), higher usage of 4G service will depend also on

the readiness of the ecosystem (4G smartphone penetration rate). We think there will be substantial increase in

LTE penetration if the LTE mobile phone price goes down to Rp500K (~USD37) considering that telco operators

do not subsidize handset (99% of subscribers using prepaid packages). There’s already LTE mobile phone priced

at Rp1.1mn (~USD81) based on price survey last May.

PT Trimegah Securities Tbk - www.trimegah.com COMPANY FOCUS 6

Figure 11. Market share among Big 3 Telco Operators

0%

20%

40%

60%

80%

Cellular subscribers market share (Big 3)

Telkomsel Indosat XL

0%

20%

40%

60%

80%

Revenue market share (Big 3)

Telkomsel Indosat - cellular XL

0%

20%

40%

60%

80%

EBITDA market share (Big 3)


Source: Company, TRIM Research

Figure 12. Big 3 Telco Operators’ EBITDA and EBITDA margin


ISAT hold 2nd biggest market share among

Big 3 Telcos. In terms of 3Q15 EBITDA, ISAT’s

market share is ~16%, slightly higher than

EXCL’s ~14%.

During previous quarter, only Telkomsel

(65% owned by TLKM) gained market share to

~71% of the three big telcos.

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(Rp

tr)

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Management’s Strategy

Figure 13. ISAT’s revenue breakdown Figure 14. Cellular revenue (9M15)

Source: Company, TRIM Research Source: Company, TRIM Research

Network modernization to support higher quality data service

Cellular revenue accounts for 81% of ISAT’s revenue. Among its three services, voice is still the biggest contrib-

utor followed with data (35% and 31% to cellular revenue respectively). To catch the opportunity from strong

data demand in Indonesia and increase network quality, the company already completed modernization (2G to

3G) on its network last July (started Nov/Dec 2012): Phase 1 (done May 2014) for key cities in Java, such as

Greater Jakarta, Surabaya, and Bandung; Phase 2 (done October 2014) for 14 cities outside Java; Phase 3 for

satellite cities, such as Sidoarjo, Gresik, and Sragen. ISAT’s 3G network already reached 23K BTS (~49% of

ISAT’s total BTS), more than EXCL’s 3G of 18K BTS (~32% of EXCL’s total BTS). Note that ISAT installed multi-

channel antenna spectrums (one antenna can support more than 1 spectrum compared to usually one antenna

(BTS) for one spectrum) during the modernization. Following the completion of the modernization, data traffic

already rose +167%YoY last quarter.

Cellular -

net

revenue

81%

Fixed

voice

4%

Fixed

data

(MIDI)

15%

Voice

35%

Data

31%

SMS

23%

VAS

4%

Others

7%

Source: Company Source: Company

Figure 15. ISAT’s 2G and 3G BTS Figure 16. 2G vs. 3G BTS composition

0

5,000

10,000

15,000

20,000

25,000

2011 2012 2013 2014 9M15

2G BTS 3G BTS

0%

20%

40%

60%

80%

100%

2011 2012 2013 2014 9M15

2G BTS 3G BTS



Figure 17. ISAT’s voice traffic


Figure 18. Voice effective price.


Figure 19. ISAT’s SMS traffic


Figure 20. SMS effective price.


Figure 21. ISAT’s data traffic


Figure 22. Data effective price.

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Figure 24. ISAT’s Total Revenue

Data as the engine of growth

On the back of growing smartphone penetration and industry’s pursuit for more rational data price, we estimate

ISAT’s data revenue to grow 12%YoY (9M15 +67%YoY) for next year, but effective data price still down by -

19%YoY (9M15 -35%YoY). We expect slower voice and SMS revenue going forward with faster decline in SMS

due to more migration to messaging service. Our 2015E/16E cellular revenue growth is 12/8%YoY, leading to

total revenue growth of 10/6%YoY. 9M15 revenue accounts 74% of our 2015E target (9M14 74% of FY). Please

see next page for details about our forecasted operational drivers. Regarding 4Q15, the company mentioned it

will accelerate some capex spending, including for LTE, to 4Q15 (still within capex guidance) from previously on

1Q16. Considering also the completion of network modernization last July, we assume lower capex portion to

revenue next year relative to this year (9M15 capex:24% to revenue).


Figure 23. ISAT’s subscriber base and implied ARPU (YoY and QoQ)

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2012 2013 2014 2015E 2016E 2017E 2018E

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tr

Cellular - net revenue Fixed voice Fixed data (MIDI)


Figure 25. Forecast drivers

Source: Companies and TRIM Research

31 December 2013A 2014A 2015E 2016E 2017E 2018E 2019E

Indosat

Mobile subs (m) 60 63 69 71 72 73 74

Subscriber market share 21.0% 20.2% 21.8% 21.8% 21.8% 21.8% 21.9%

Implied ARPU (Rp 000) 27 26 27 28 29 30 30

% change -2.2% -3.4% 3.4% 2.1% 3.0% 3.2% 1.7%

Voice

Outgoing MOU (min/sub/month) 46 41 38 40 42 43 45

Total MOU (min/sub/month) 93 78 70 68 70 72 73

Total minutes carried 62 54 56 57 60 62 64

% change -6.0% -12.7% 4.2% 2.2% 4.0% 4.0% 3.0%

Incoming minutes (%) 29% 29% 30% 30% 30% 30% 30%

Voice revenue / outgoing minute (Rp) 211 244 195 199 201 203 205

% change 14.0% 15.4% -20.0% 2.1% 1.0% 1.0% 1.0%

Data

Data traffic (terabyte) 30,517 85,359 203,236 283,435 323,115 355,427 383,861

% change 100.8% 179.7% 138.1% 39.5% 14.0% 10.0% 8.0%

Data Rate (Rp/kb) NA NA 0.03 0.03 0.03 0.02 0.02

% change NA NA NA -19.4% -5.0% -3.0% -1.0%

SMS

Outgoing SMS (bn) 274 237 241 236 234 231 229

% change 1.9% -13.5% 1.5% -1.9% -1.0% -1.0% -1.0%

Revenue / outgoing SMS (Rp) NA NA 21 22 22 22 23

% change NA NA NA 6.9% 0.5% 0.5% 0.5%

(in Rp tr)

Cellular - net revenue 19.4 19.5 21.7 23.4 24.5 25.6 26.5

% change 4.8% 0.5% 11.5% 7.8% 4.7% 4.7% 3.4%

Fixed voice service 1.2 1.1 1.1 0.9 0.9 0.9 0.9

% change 18.9% -9.8% -1.0% -15.5% -1.0% -1.0% -1.0%

Fixed data (MIDI) 3.3 3.5 3.7 3.7 3.8 3.9 3.9

% change 12.3% 7.4% 5.3% 1.4% 1.4% 1.4% 1.4%

Net revenue 23.9 24.1 26.5 28.1 29.2 30.4 31.3

% change 6.4% 1.0% 10.0% 5.9% 4.0% 4.1% 3.1%

EBITDA 10.4 10.1 11.3 11.9 12.3 12.7 12.9

% change -1.6% -3.1% 12.7% 5.2% 3.0% 3.0% 2.0%

EBITDA margin 43.5% 41.8% 42.8% 42.5% 42.1% 41.6% 41.2%

Capex / revenue 39.3% 29.2% 29.1% 26.3% 26.4% 26.4% 26.4%


Cost efficiency supports EBITDA growth

As ISAT plan to do rebranding around this month, near to 4G LTE momentum (1,800Mhz refarming schedule to

finish by Nov), we expect possible increase in marketing and related expenses. For next year, the company said

there’s still possible further cost efficiency, e.g. from power expense. We expect 2015E/16E EBITDA growth of

13/5%YoY (9M15 13%YoY) with both at ~43% margin. 9M15 EBITDA is 76% of our FY target (vs. 9M14 76% of

FY).

Figure 27. EBITDA and EBITDA margin



Figure 26. Opex excl. D&A composition

0%

20%

40%

60%

80%

100%

3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

Interconnection Radio frequency fee Personnel

G&A Maintenance Marketing

Utilities Leased circuit Others

38%

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EBITDA EBITDA margin


Further deleveraging plan

ISAT said monetization of a section of its towers is considered likely next year to reduce debt. The company still

exploring various options on how to best monetize it. Currently, ISAT has ~8.6K towers. Our forecast has not

included the potential 2nd tower sale. Regarding ISAT’s plan to release IDR bond Rp900bn (part of continues se-

ries bond), we already include the proceed of bond issuance in our 2015E debt and remaining part of continues

series bond (PUB) ~Rp3.5tr next year in 2016E debt. We targets USD debt portion of 29% next year.

Figure 28. Interest bearing debt breakdown as of 9M15

Source: Company

USD Loan

(USD 506mn)

33%

IDR Bank

Loan

67%

ISAT

Weighted avg. shares outstanding (bn) 5

Last market price (Rp) 4,745

Market cap (Rp bn) 25,782

Assumption of potential number of towers sold in the beginning of 2016E (towers) 1,000

Implied value / tower (Rp bn) 1.2

Potential cash received (Rp bn) 1,209

Implied towers' EV to EBITDA (x) 9.0

Assuming sales-and-lease back under operating lease

Figure 29. Estimated potential proceed assuming tower section sold at 9x EV/EBITDA



2016E

(in Rp bn except stated otherwise)

Before 2nd tower sale

After 2nd tower sale Diff. (%)

ISAT's tower leasing business Estimated number of towers owned by ISAT (towers) 8,600 7,600 (1,000) (11.6)

Assumed number of towers sold 1,000 Revenue ISAT received from its towers' tenants Rp bn 711 628 (83) (11.6)

Assumed monthly rental Rp mn /month 10 10

Number of tenants BTS 5,925 5,925 ~Total tenancy ratio 1.40 1.40 Implied third party tenancy ratio 0.69 0.69 Implied Indosat's own tenancy in their towers 0.71 0.71 Assumption:

2016E tower lease revenue same as annualized 9M15

Revenue decline proportionate to number of owned towers

EBITDA ISAT received from its towers' tenants 569 503 (66) (11.6)

Assumptions: EBITDA margin 80% 80% 80%

Note: Tower companies' EBITDA margin:

SUPR 83% TBIG 82%

ISAT's tower rental expense to tower operator

Additional tower rental expenses post sale NA 85 (85) NA

- what ISAT pays to buyers Assumptions: Monthly rental / BTS (Rp mn) 10

ISAT's EBITDA 11,925 11,774 (151) (1.3)

ISAT's Market cap, net debt, and Enterprise Value Market cap (current price) 25,782 25,782

Net debt 11,102 9,893 (1,209) (10.9)

EV (current price) 36,885 35,676 (1,209) (3.3)

ISAT's 2016 Net Debt/EBITDA (x) 0.9 0.8

ISAT's 2016 EV/EBITDA (x) 3.1 3.0

Figure 30. Potential impact if 2nd tower sale-and-leased-back occur in early 2016E

Source: Company, Bloomberg, TRIM Research


YE Dec 31 (in Rp b) 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F 2026F

EBIT 3,734 3,654 3,433 3,186 3,176 4,137 4,252 4,078 4,379 4,185

Tax Rate 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0% 25.0%

EBIT*(1-t) 2,801 2,740 2,575 2,390 2,382 3,103 3,189 3,059 3,284 3,139

+ D & A 8,550 9,001 9,478 9,983 10,219 9,514 9,666 10,136 9,732 10,183

- Capex (7,698) (8,017) (8,266) (8,520) (8,757) (8,972) (9,196) (9,395) (9,515) (9,689)

+ Decrease/(increase) in non

cash working capital 336 319 275 297 294 287 301 293 258 292

FCFF 3,988 4,043 4,062 4,149 4,138 3,932 3,960 4,094 3,760 3,923

FCFF - Discounted 3,613 3,319 3,021 2,795 2,526 2,174 1,984 1,858 1,546 1,462

Value of cash-flows thro 2026 24,297

Terminal value- 3x EV/EBITDA 16,057 Risk-Free rate 8.40%

Equity market risk premium 5.00%

Enterprise value 40,354 Beta 1.00

Net Debt / (Cash) 11,102 Cost of equity 13.40%

# of shares 5,434 Post-tax cost of debt 8.25%

Value per share (mn) 5,384 Debt/Capital ratio 59%

10.4% WACC

Target price after rounding 5,400

Figure 31. DCF calculations


Figure 32. Forward historical EV/EBITDA - Big 3 Telcos


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EXCL Fw-EV/EBITDA TLKM Fw-EV/EBITDA ISAT Fw-EV/EBITDA

6.0

7.1

3.3



Figure 33. ISAT’s forward historical EV/EBITDA

2.5

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ISAT Fw-EV/EBITDA ISAT Fw-EV/EBITDA avg Fw-EV/EBITDA + 1 STD

Fw-EV/EBITDA - 1 STD Fw-EV/EBITDA - 2 STD Fw-EV/EBITDA + 2 STD

3.1

3.8

4.5

5.2

5.9

3.3

Valuation: Buy with 10% upside to TP Rp5,300

To arrive at our DCF-based TP, we assume 9.9% WACC, 1.0 Beta, and 3x EV/EBITDA for the terminal value. The

terminal value’s EV/EBITDA is still lower than EXCL (4x) despite ISAT’s market share is slightly below EXCL

among Big 3 Telcos. We note that ISAT trades at lower liquidity (ISAT’s public’s ownership ~15%) than EXCL.

ISAT’s terminal value EV/EBITDA is also significantly below Telkomsel (65% owned by TLKM) of 9x justified by

Telkomsel’s leadership in the industry.

Current market price implied 3.1x 2016E EV/EBITDA and 3.0x 2017E EV/EBITDA, still lower than EXCL

(2016/17E 6.2/6.0x) although 3Q15 ISAT’s market share is slightly higher than EXCL. We think there might be

further upside to ISAT when:

1) It can sustain similar level of EBITDA margin to 3Q15 (after modernization) as we noticed that the compa-

ny’s EBITDA margin was 47% in FY12 (modernization start Nov/Dec 2012).

2) The company can gain market share.

3) Management can manage its capex better. We currently assume capex at 26% to revenue for ISAT, higher

than our assumption for EXCL’s (15-22%) during 2016E-26E.

4) The company can lower its USD forex risk faster.

5) Positive solution to IM2 case as it becomes part of the Indonesia’s telco industry issue. We still forecast the

IM2 loss estimate as provision in our long term forecast considering the Ministry’s support and company’s

optimism.

6) Substantial time needed to achieve significant 4G penetration which support ISAT to gain market share in

the growth of data service using 3G (3G handset still more affordable than 4G). Most of Indonesia’s cellular

subscribers still use 2G handset.

In terms of PE, the company trades at 25.6x 2016E PE and 18.0x 2017E PE, higher than TLKM (2016E/17E PE

for TLKM 14.7/13.5x). We still estimate a negative core bottom line for EXCL in 2016 to recover to positive in

2017 (2017E PE of 634.5x).


Risks

Foreign exchange risk

As telco operator is a capital intensive business and its capex, e.g. for network equipment, tends to be imported

with payment to vendor using USD, the company used USD loan to help to finance its capex. Meanwhile, most of

the company’s revenue is in IDR. IDR weakness to USD could cause higher forex loss, interest expense, and low-

er profit, and also higher principal payment for the USD loan leading to higher risk of liquidity. IDR weakness to

USD also cause increase in fund amount required to finance its capex and rise in operational cost. This might

lead to lower network upgrade, expansion, less maintenance, and/or less purchase of items and services, which

might cause the company provide service with quality not as high as before and lower its ability to compete.

Competition Risk

We think the telco industry in Indonesia is very competitive. If competitor lower its price substantially as its mar-

keting strategy to grab market share for some times, it might cause the company losing its price-sensitive sub-

scribers and follow to decrease its price as well to remain competitive. This could lead to price war causing the

industry cannot monetize its investment properly nor growing its business in a sustainable way.

Technology change risk

As technology kept evolving, if the company cannot or too slow to invest in new technology which the industry

already adopted, the company could lose its competitiveness, such as in form of declining ARPU.

Interest rate risk

The company is exposed to risk from interest rate changes for its interest bearing debt. If interest rate goes up,

it cause higher interest expense and lower bottom line.


Company Background

ISAT is one of Indonesia’s leading telecommunication and information service providers in Indone-

sia, established in 1967. It provides cellular, fixed data, and wireless broadband services, fixed tel-

ecommunication or fixed voice offerings, and digital services. Together with its subsidiaries, PT In-

dosat Mega Media (IM2) and PT Aplikanusa Lintasarta, Indosat provides fixed data or Multimedia,

Internet & Data Communication services, as well as IT services to corporates.

Source: Company

Figure 34. ISAT’s group structure, share ownership, and subsidiaries


Income Statement (Rpbn)

Year end Dec 2014 2015F 2016F 2017F 2018F

Revenue 24,085 26,505 28,074 29,210 30,397

Revenue Growth (%) 1% 10% 6% 4% 4%

Gross Profit NA NA NA NA NA

Opr. Profit 1,833 2,707 3,470 3,734 3,654

EBITDA 10,059 11,337 11,925 12,284 12,655

EBITDA Growth (%) -3% 13% 5% 3% 3%

Net Int Inc/(Exp) (2,264) (2,684) (1,994) (1,692) (1,151)

Gain/(loss) Forex (395) (2,329) 0 0 0

Other Inc/(Exp) (1,110) 432 141 141 141

Pre-tax Profit (1,936) (1,874) 1,616 2,184 2,644

Tax 78 417 (404) (546) (661)

Minority Int. (129) (133) (100) (102) (103)

Extra. Items 0 0 0 0 0

Reported Net Profit (1,987) (1,590) 1,112 1,536 1,880

Core Net Profit (542) (116) 1,006 1,430 1,774

Growth (%) -18% -79% -969% 42% 24%

Dividend per share (183) (146) 102 141 173

growth (%) -29% -20% -170% 38% 22%

Dividend payout

ratio

50% 50% 50% 50% 50%

Balance Sheet (Rpbn)

Year end Dec 2014 2015F 2016F 2017F 2018F

Cash and equiva-

lents

3,480 8,422 9,406 3,580 3,644

Other curr asset 5,111 5,461 5,464 5,526 5,625

Net fixed asset 40,776 61,537 60,475 59,623 58,639

Other asset 3,903 4,490 4,912 4,748 4,996

Total asset 53,270 79,911 80,257 73,476 72,905

ST debt 11,797 5,860 8,095 2,454 2,769

Other curr liab 9,351 14,625 14,758 15,155 15,573

LT debt 11,350 16,863 12,413 9,959 7,190

Other LT Liab 6,474 29,214 29,636 29,471 29,720

Minority interest 681 814 915 1,016 1,120

Total Liabilities 38,971 66,563 64,901 57,039 55,252

Shareholders Equity 13,618 12,534 14,441 15,421 16,533

Net debt / (cash) 19,666 14,301 11,102 8,833 6,315

Total cap employed 32,122 59,425 57,404 55,867 54,563

Net Working capital (12,557) (6,602) (7,982) (8,503) (9,073)

Debt 23,146 22,723 20,508 12,413 9,959

Cash Flow (Rpbn)

Year end Dec 2014 2015F 2016F 2017F 2018F

Core Profit (542) (116) 1,006 1,430 1,774

Depr / Amort 8,226 8,630 8,456 8,550 9,001

Chg in Working Cap 1,981 4,924 129 336 319

Others (2,316) (1,475) 106 106 106

CF's from oprs 7,349 11,963 9,697 10,422 11,200

Capex (6,391) (7,725) (7,393) (7,698) (8,017)

Others 1,388 133 100 102 103

CF's from investing (5,004) (7,592) (7,293) (7,597) (7,914)

Net change in debt (1,008) (423) (2,215) (8,095) (2,454)

Others (49) 994 795 (556) (768)

CF's from financing (1,057) 571 (1,420) (8,651) (3,222)

Net cash flow 1,246 4,942 984 (5,826) 64

Cash at BoY 2,234 3,480 8,422 9,406 3,580

Cash at EoY 3,480 8,422 9,406 3,580 3,644

Free Cashflow 958 4,238 2,303 2,723 3,183

Key Ratio Analysis

Year end Dec 2014 2015F 2016F 2017F 2018F

Profitability Gross Margin (%) NA NA NA NA NA

Opr Margin (%) 7.6% 10.2% 12.4% 12.8% 12.0%

EBITDA Margin (%) 41.8% 42.8% 42.5% 42.1% 41.6%

Core Net Margin (%) -2.3% -0.4% 3.6% 4.9% 5.8%

ROAE (%) -3.6% -0.9% 7.5% 9.6% 11.1%

ROAA (%) -1.0% -0.2% 1.3% 1.9% 2.4%

Stability Current ratio (x) 0.4 0.7 0.7 0.5 0.5

Net Debt to Equity (x) 1.4 1.1 0.8 0.6 0.4

Net Debt to EBITDA (x) 2.0 1.3 0.9 0.7 0.5

Interest Coverage (x) 0.8 0.9 1.4 1.7 2.7

Efficiency A/P (days) NA NA NA NA NA

A/R (days) 32 31 30 30 30

Inventory (days) NA NA NA NA NA

Interim Result (Rpbn)

3Q14 4Q14 1Q15 2Q15 3Q15

Sales 6,104 6,368 6,093 6,527 6,962

Gross Profit NA NA NA NA NA

EBITDA 2,567 2,466 2,604 2,758 3,205

Opr. Profit 527 232 536 657 1,128

Net profit (212) (657) (456) (278) (389)

Core profit (56) (349) (64) 11 116

Gross Margins (%) NA NA NA NA NA

EBITDA Margins (%) 42% 39% 43% 42% 46%

Opr Margins (%) 9% 4% 9% 10% 16%

Net Margins (%) -3.5% -10.3% -7.5% -4.3% -5.6%

Core Margins (%) -0.9% -5.5% -1.1% 0.2% 1.7%

Capital History

Date

19-Oct-94 IPO @ Rp. 7,000

PT Trimegah Securities Tbk

Gedung Artha Graha 18th Floor

Jl. Jend. Sudirman Kav. 52-53

Jakarta 12190, Indonesia

t. +62-21 2924 9088

f. +62-21 2924 9150

www.trimegah.com

DISCLAIMER

This report has been prepared by PT Trimegah Securities Tbk on behalf of itself and its affiliated companies and is provided for information

purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy. This report has

been produced independently and the forecasts, opinions and expectations contained herein are entirely those of Trimegah Securities.

While all reasonable care has been taken to ensure that information contained herein is not untrue or misleading at the time of publication,

Trimegah Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. This report is

provided solely for the information of clients of Trimegah Securities who are expected to make their own investment decisions without reliance

on this report. Neither Trimegah Securities nor any officer or employee of Trimegah Securities accept any liability whatsoever for any direct or

consequential loss arising from any use of this report or its contents. Trimegah Securities and/or persons connected with it may have acted

upon or used the information herein contained, or the research or analysis on which it is based, before publication. Trimegah Securities may in

future participate in an offering of the company’s equity securities.

november 13, 2015 indosat - trimegah...2015/11/12 · indosat 57.5 2.5 10.0 20.0 10.0 15.0 xl...

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