TOWR | BUY IDR800 TP | Covering land and air
Analyst: Aditya Eka Prakasa
+6221 23587222 ext 182
aditya.prakasa@bcasekuritas.co.id
Despite operators aggressively expanding their network ex-Java, we see that colocation demand within Java is still strong given the congested network. Hence, we believe that upside revenue should come from additional colocation, aside from built to suit orders.
As we embrace 5G in the next 4 years, operators have started to fiberize their towers to accommodate a higher spectrum (5G uses 26-28GHz). To cater the future demand, TOWR already has 7.2k km fiber optics, through iForte, with another 16k km fiber optics are already in the pipeline.
Despite the recent KIN acquisition, TOWR’s net gearing still remains manageable, still the lowest compared to its peers. With a healthy balance sheet, TOWR is set for an M&A, if there are any. If none, tower is prepared for an organic growth, with dividend payment to be distributed regularly.
We reiterate our BUY call on TOWR with IDR800 TP (based on 2019 EV/EBITDA of 8.9x).
Please find our full report at:
https://goo.gl/uwT7NZ
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