Unleashing the Boundless Profit Leap
Key Takeaways:
• MTEL's net profit for 1H23 grew by 14.7% YoY to IDR1.0 tn, driven by a higher revenue growth to IDR4.1 tn (+10.8% YoY), a decrease in monthly repair & maintenance costs per tower by 16.5% YoY, and a significant EBITDA margin expansion to 81.2% (from 77.5% in 1H22).
• In FY23E, MTEL's revenue is expected to grow by 9.6% YoY, predominantly due to the addition of tenants for +6k. A tenancy ratio is projected at 1.52x, with a potential rise to 1.70x in FY28F. Revenue from fiber could account for 2.1% of total revenue, as MTEL plans to deploy an additional 13k km of fiber this year, expanding its portfolio to around 29.6k km.
• The number of towers is estimated to grow at a 7.8% CAGR (FY22-FY25F) with market share potential reach ~40% in FY25F (vs 34.2% in FY22).
• We recommend BUY with target price of IDR850/share. Key upside include potential interest rate cuts and faster than expected margin expansion, while downside risks encompass a slower rollout in its fiber business.
MNCS Research
Disclaimer On
