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