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TLKM, an 87% higher target price
Current, target price 3,370, 6,292 (+87%)

September 2nd, 2021
1 minute read

Sales above forecast

• Sales grew by 5% in the second quarter to 35,535 billion rupiah which is above our forecast 34,624 billion rupiah.
• This brings the average quarterly growth to 2%.
• We predict average growth of another 2% in this next 12 months to bring sales to 37,684 billion rupiah in the second quarter of 2022.

Costs slightly higher

• The cash cost ratio of net profit add non cash costs minus sales as a percent of sales was up slightly at -55% in the second quarter & profit was a slower 2% growth to 8,533 billion rupiah.
• Average quarterly costs are now at -56%.
• We use the latest -55% costs to predict a 9,497 billion rupiah profit in the second quarter of 2022.

Data & model

Cashflow lower, but forecasting a record 9 trillion

• Cashflow was lower at 8,434 billion rupiah with higher investment spending of -6,084 billion rupiah in the second quarter.
• Average quarterly Cashflow has now improved to 7,555 billion rupiah.
• We use the same -6,084 billion rupiah investment spending which with higher sales gives a 9,166 billion rupiah cashflow in the second quarter of 2022.

Balance sheet, higher leverage

• Cash jumped from 31,729 to 36,613 billion rupiah in the second quarter.
• But liabilities also jumped from 129,950 to 153,870 billion rupiah so net cash worsened from -98,221 to a record -117,257 billion rupiah.
• With our forecast higher cashflow & a -10,767 billion rupiah equity payout, net cash will be back to -86,823 billion rupiah in 12 months time.

Value, an 87% higher target price

• TLKM capital from the last six years declined to 100,666 billion rupiah in the second quarter.
• At the current market value of 333,800 billion rupiah, based on our forecasts, it’s at 2.29X sales & 1.28X assets with a 3% yield.
• Our free cashflow forecast is 36,663 billion rupiah. At 17X, this gives an 87% higher target price of 6,292 rupiah.