Unpacking TOWR’s Performance Metrics and Strategic Acquisition
Key Takeaways:
▪️In 1Q24, TOWR booked a revenue of IDR3.05trillion (+0.85% QoQ/+6.35% YoY), representing each 24.67%/24.69% of our target and consensus. The tower segment grew flattish (-1.05% QoQ/+0.97% YoY) while the non-tower business improved well (+5.23% QoQ/+20.17% YoY). Our estimations for the total revenue to grow by +5.20%/+7.07% YoY in FY24E/FY25F.
▪️The net profit in 1Q24 stood at IDR797.39billion (-3.64% QoQ/+5.98% YoY), reflecting 22.97%/22.94% of our estimation/consensus. We expect the bottom-line to increase by +6.72%/10.74% YoY in FY24E/FY25F.
▪️The IBST acquisition (90.11%) was closed at IDR2,813/share. We view this investment as a sweet deal at 11.76x EV/EBITDA and 0.61x PBV. We expect IBST to complement relatively positive towards TOWR’s performance overall, but we consider the potential burden of debt towards the company’s performance as one dilutive factor.
▪️We maintain a BUY recommendation for TOWR with a TP of IDR1,050/share (+40.94% upside), implying 8.33x of FY24E EV/EBITDA.
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