CIMB What's on The Table

Quick Takes – Telekomunikasi Indonesia – A rebound in 4Q08

SingTel's 3QFY09 results revealed some of Telkomsel's financial results and operating indicators that suggest a fairly strong turnaround in 4Q08. Revenue, ARPU
and subscriber base rose 12% qoq, 10% and 8% respectively. EBITDA margins rebounded to 60% in 4Q08 from 55% in 3Q, driving PBT up 17% qoq, excluding a fair-value loss. We reiterate that with stable tariffs and no significant differences among telco offerings, consumers would gravitate towards the market leader in terms of coverage and brand, which is Telkomsel.

Maintain OUTPERFORM and DCF-based target price of Rp7,300. Price catalysts could include a results turnaround, and higher market share.