Navigating Expansion: Journey of Growth, Acquisitions, and a Promising Future
Key Takeaways:
▪️MTEL substantiates its leading position in Indonesia’s digital infrastructure industry through both organic and several acquisitions of towers and fiber optics in FY23E, resulting in total 37,894 towers (41.55% inside Java and 58.45% ex-Java), estimation of 1.51x/1.55x tenancy ratio in FY23E/FY24E, and ~30,000 km of fiber optic rollouts in FY23E.
▪️We forecast the revenue to grow at +11.4% YoY in FY23E and +9.9% YoY in FY24E, supported by the increasing income in tower leasing and fiber optics segments.
▪️Preparing capex of ~IDR6 tn for FY24E, MTEL is in for the tender offer to acquire the shares of PT Inti Bangun Sejahtera Tbk (IBST) who owns 16,642 km of fiber optic, 3,383 towers with 5,791 tenants, and tenancy ratio of 1.71x.
▪️Our projections on MTEL’s Net Debt/EBITDA ratio is 1.6x for both FY23E and FY24E, reflecting MTEL’s reflects MTEL’s likeliness to win this tender offer and capacity for other inorganic acquisitions in the future.
▪️We maintain a BUY recommendation for MTEL with TP of IDR880/share (+32.3% upside), implying 11.3x of FY24E EV/EBITDA.
Disclaimer On
