MORNING CALL:11/12/23

PIVB recognises Jati Tinggi’s electrifying post-IPO plans

Transcript

00:00 Aksiata recently held its Analysts and Investors Day where Kenanga walked away a bit neutral

00:06 on its prospects, tempered by high funding requirements.

00:09 It is however keeping its outperformed call and RM3.10 target price, which implies a possible

00:14 upside of 31%.

00:17 Aksiata aims to be a multi-platform builder to achieve its aspiration to be a sustainable

00:22 dividend company.

00:23 The various strategies identified by the group to realise its targets include, among others,

00:28 reduce hokoh costs by about 20%, rebalance loans at frontier markets to reduce USD exposure,

00:34 pare down its debt over 2024 to 2026, and monetise infrastructure and digital businesses

00:40 in 2025 to 2026.

00:43 Aksiata though is on track on its plans to evolve from a pure telco player to a telco

00:48 techco.

00:50 Aksiata actually revealed its structural transformation of Excel and LinkedIn in Indonesia, which

00:54 aligns with the group's delayering strategy where Excel becomes a Servco and LinkedNet

00:59 transformed into a Fibreco.

01:02 Indonesia's low-fixed broadband penetration market has gaps that translate into growth

01:06 opportunities for Excel and LinkedNet.

01:09 On the flip side though, rollout of these gestational fibre assets requires substantial

01:14 capex.

01:15 This is evident from Fibreco's expectations that it will require peak funding of about

01:19 500 to 600 million USD in 2026.

01:22 Therefore, Aksiata has plans to rope in investors in the future to fund LinkedNet's growth

01:27 plans.

01:28 Aksiata is very well covered and there are 7 buys, 8 holds and 3 sells, which is why

01:32 average target price of RM2.63 is only around 27 cent more than its last close.

01:37 Thanks for watching.