Strategic Corporate Actions Boom
Key Takeaways:
▪️ The Analog Switch Off (ASO) implementation has freed up the golden 700 MHz frequency spectrum for 5G services deployment. Planned to be auctioned in FY24, the industry players like XL Axiata has affirmed their interest to win and prepare the up front fee while still maintain the strategic approaches unpublished.
▪️ Preparing NeutraDC for overflowing market demand of data centre at 33% CAGR in FY31F, Telkom Group is establishing Hyper Data Centre (HDC) in Batam and has announced of value unlock potential. Earmarking to be one of the major players in Indonesia with 400MW capacity in FY30, NeutraDC estimated to hit robust profitability of IDR505bn revenue (+166% YoY) and IDR61bn EBITDA (+221% YoY) by the end of this year.
▪️ Getting more grounded after being on the air for over 2 years, XL and Smartfren merger will bring heaps of benefits for both companies and industry competitive landscape. With reference of 9M23, the total subscribers will add up to 93.7mn and 34% of spectrum market share, allowing it to have closer comparability with other major players.
▪️ We maintain an OVERWEIGHT rating for the telecommunication sector with TLKM and EXCL as our top picks due to their robust performance and business expansions going forward. We value TLKM and EXCL with TP of IDR4,650/share and IDR2,700/share respectively.
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