Company Coverage
Telkom Indonesia (TLKM IJ): Value Unlocked With Potential Execution Risks
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rp2,370
Rp3,300
+39.2%
Rp3,600
Analyst
Analyst
Highlights
- TIF remains the key catalyst, with 10.3% dividend yield. TIF Phase 2 completion and a potential strategic stake sale could provide further value realisation on top of the attractive dividend yield.
- Core operations continue to improve. Rising mobile ARPU, continued ERP-led efficiency gains and 5G expansion support the outlook.
- Maintain BUY with a lower target price of Rp3,300.
Analysis
- TIF as the main value-unlocking catalyst with normal dividend yield at attractive level. The next major catalyst is the completion of Telkom InfraCo (TIF) Phase 2, with shareholder approval scheduled for the 30 September Extraordinary General Meeting of Shareholders (EGM) and completion expected in early-4Q26. The transaction will further consolidate Telkom Indonesia’s (TLKM) wholesale fibre connectivity business into TIF, strengthening its scale ahead of a potential strategic stake sale. Management is also still evaluating whether to consolidate additional fibre assets before proceeding with the strategic investor process, which could further increase TIF’s scale but potentially extend the monetisation timeline. At an 8-9x targeted EV/EBITDA valuation, versus around 3.7x for TLKM currently, TIF could command a meaningful premium once it reaches the targeted revenue and EBITDA of around Rp26t and Rp9t-10t, respectively. Beyond TIF, a data centre stake sale, property assets and potential GOTO shares divestment remain as additional monetisation avenues, which could support future value realisation above the current expected 2027F dividend yield of 10.4%.
- Near-term execution could face some uncertainty from management changes and asset reorganisation. The 30 September EGM also includes an agenda to change some of TLKM’s Board of Directors and commissioners, which could introduce some short-term execution risk as the new management structure reviews ongoing priorities and projects. Separately, the planned use of Graha Merah Putih (GMP) by Badan Gizi Nasional (BGN) is expected to involve the relocation of several TelkomGroup units, while the rental area, duration and transaction value remain under discussion. Telkom has framed the move as part of property asset optimisation and said it could create additional connectivity and digital-service opportunities, but the transition could add some operational risk.
Highlights
- TIF remains the key catalyst, with 10.3% dividend yield. TIF Phase 2 completion and a potential strategic stake sale could provide further value realisation on top of the attractive dividend yield.
- Core operations continue to improve. Rising mobile ARPU, continued ERP-led efficiency gains and 5G expansion support the outlook.
- Maintain BUY with a lower target price of Rp3,300.
Analysis
- TIF as the main value-unlocking catalyst with normal dividend yield at attractive level. The next major catalyst is the completion of Telkom InfraCo (TIF) Phase 2, with shareholder approval scheduled for the 30 September Extraordinary General Meeting of Shareholders (EGM) and completion expected in early-4Q26. The transaction will further consolidate Telkom Indonesia’s (TLKM) wholesale fibre connectivity business into TIF, strengthening its scale ahead of a potential strategic stake sale. Management is also still evaluating whether to consolidate additional fibre assets before proceeding with the strategic investor process, which could further increase TIF’s scale but potentially extend the monetisation timeline. At an 8-9x targeted EV/EBITDA valuation, versus around 3.7x for TLKM currently, TIF could command a meaningful premium once it reaches the targeted revenue and EBITDA of around Rp26t and Rp9t-10t, respectively. Beyond TIF, a data centre stake sale, property assets and potential GOTO shares divestment remain as additional monetisation avenues, which could support future value realisation above the current expected 2027F dividend yield of 10.4%.
- Near-term execution could face some uncertainty from management changes and asset reorganisation. The 30 September EGM also includes an agenda to change some of TLKM’s Board of Directors and commissioners, which could introduce some short-term execution risk as the new management structure reviews ongoing priorities and projects. Separately, the planned use of Graha Merah Putih (GMP) by Badan Gizi Nasional (BGN) is expected to involve the relocation of several TelkomGroup units, while the rental area, duration and transaction value remain under discussion. Telkom has framed the move as part of property asset optimisation and said it could create additional connectivity and digital-service opportunities, but the transition could add some operational risk.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rp2,370
Rp3,300
+39.2%
Rp3,600
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
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