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The Week that Was in ASEAN@Smartkarma - Indonesian Telcos, The Freeport Saga, and Amata in Vietnam

PT Telekom  (TLKM IJ) Rebounds Strongly in 3Q18 After a Weak 1H. More to Come as Prices Edge Higher

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Indonesian Telecoms: Growth Interrupted in 1Q, Wiht Indosat Hard Hit

Indonesian Telecoms: XL Axiata Makes Strong Gains, Telkom Treads Water and Indosat Struggles

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New Street Research Insights

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Equity Bottom-Up

We wrote recently on <a href="https://www.smartkarma.com/entities/1051" target="_blank" data-smartkarma-citation="entities:1051:1">Telekom Indonesia (TLKM IJ)</a> following signs of a recovery in its 3Q18 numbers. On further reflection,  <a href="https://www.smartkarma.com/profiles/1917" target="_blank" data-smartkarma-citation="accounts:1917">Chris Hoare</a> has upgraded his numbers. Indonesian mobile has been through a tough patch, with a bruising price war in data and the disruptive influence of prepaid SIM-registration. Both are now ending which is allowing Telkomsel’s revenue trends to inflect. At the same time, the strong broadband environment is leading to accelerating fixed line revenues.We believe Indonesia mobile is in the early stages of price recovery as smaller operators are at the limit of what is sustainable. The pain at <a href="https://www.smartkarma.com/entities/5737" target="_blank" data-smartkarma-citation="entities:5737:1">Indosat (ISAT IJ)</a> has been particularly intense but <a href="https://www.smartkarma.com/entities/15028" target="_blank" data-smartkarma-citation="entities:15028:1">XL Axiata (EXCL IJ)</a> also needs to boost returns, and has been explaining to investors that it is raising prices selectively (it does not show up in yields yet).  With modest prices increases (from very low levels) we look for revenues to accelerate and margins to rise. That is a powerful tailwind. We maintain a BUY on TLKM and raise our target price to IDR4,900.Valuation summary:<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/071/651/original/tlkm%20multiples.jpg?1543469856" class="editor-image img-responsive" data-smartkarma-image-id="71651"></figure><div class="content-caption">Source: New Street Research</div>

We wrote recently on Telekom Indonesia (TLKM IJ) following signs of a recovery in its 3Q18 numbers. On further reflection,  Chris Hoare has upgraded his numbers. Indonesian mobile has been through a tough patch, with a bruising price war in data and the disruptive influence of prepaid SIM-registration. Both are now ending which is allowing Telkomsel’s revenue trends to inflect. At the same time, the strong broadband environment is leading to accelerating fixed line revenues.We believe Indonesia mobile is in the early stages of price recovery as smaller operators are at the limit of what is sustainable. The pain at Indosat (ISAT IJ) has been particularly intense but XL Axiata (EXCL IJ) also needs to boost returns, and has been explaining to investors that it is raising prices selectively (it does not show up in yields yet).  With modest prices increases (from very low levels) we look for revenues to accelerate and margins to rise. That is a powerful tailwind. We maintain a BUY on TLKM and raise our target price to IDR4,900.Valuation summary:Source: New Street Research

テレコム・インドネシア（TLKM IJ）は、競争上の脅威が管理可能と思われる中、成長と利回りを実現

Telkom Indonesia

テレコム・インドネシア（TLKM IJ）は、競争上の脅威が管理可能と思われる中、成長と利回りを実現