Vibrant Growth and Innovation – What to Expect Next
Key Takeaways:
▪️MTEL booked a revenue of IDR4.45 tn in 1H24 (+7.75% YoY), reflecting to 47.84%/47.91% of our/consensus estimates, driven by the tower leasing segment (+7.27% YoY), tower-related business (+7.80% YoY), and the fiber optic segment (+103.49% YoY). EBITDA was reported at IDR3.70 tn (+10.22% YoY) in 1H24, with margin rising to 83.06% from 81.20% in 1H23. Meanwhile, bottom-line saw a +4.09% YoY increase to IDR1.06 tn in 1H24, reflecting to 50.06%/49.95% of our/consensus projections, with NPM stabilized at 22.85% (vs 22.93% in 1H23).
▪️We maintain our optimism for MTEL to see a revenue growth of 8.21%/11.26% YoY to IDR9.30/IDR10.35 tn in FY24E/FY25F, primarily driven by the tower leasing and the fiber optics segments. Following this, we estimate the EBITDA to improve by +8.03%/+12.07% YoY in FY24E/FY25F, with a margin of 83.97%/84.58%.
▪️MTEL has signed an MoU with AALTO HAPS Ltd on July 17th, 2024, to explore High Altitude Platform Station (HAPS), expected to be a promising new technology to provide connectivity, particularly in rural areas (3T). MTEL aims to complete this exploration phase by the end of FY25F, with the launch targeted for early FY26F.
▪️We maintain a BUY recommendation for MTEL with slightly lower TP at IDR820/share (+22.93% upside), 9.70x/8.90x of FY24E/FY25F EV/EBITDA.
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