TBIG - Jump on fiber bandwagon

KBVS Update
Tuesday, 5 December 2023

TBIG: Jump on fiber bandwagon
(Maintain BUY; TP: IDR2,150)

•    We expect fiber revenue contribution that jumped to nearly 5% in 9M23 to further expand and become growth trajectory in-line with growing demand for fixed-broadband and 5G commercialization going forward.

•    TBIG's 3Q23 EBITDA declined 0.64% qoq to IDR1.44 tn, bringing 9M23 EBITDA of IDR4.28 tn, below ours/consensus by 3.4%/0.7%. The lower EBITDA qoq in 3Q23 was mainly dragged by higher cash cost.

•    TBIG's revenue slightly grew 0.7% qoq/0.6% yoy in 3Q23/9M23 to IDR1.67tn/IDR4.95tn as tenancy fee inched up 1.9% qoq in 3Q23 to IDR12.6mn amid net additions of 137 tower tenants.  Tower sites stood at 22,175 (+149 qoq) in 3Q23, bringing tenancy ratio at 1.87x.

•    Despite potential from conclusion of IOH network reconfiguration, we readjust our ’24 EBITDA forecasts by -8.8% on the back of pressure on tenancy fee and higher costs amid fiber deployment.

•    Maintain our HOLD call with a target price of IDR2,150 implying 13.0x of '24 EV/EBITDA, or within 5-year average historical mean. Our DCF calculation is also aligned with the valuation.

Regards,
Devi Harjoto – KBVS Research