JAKARTA – PT Dayamitra Telekomunikasi Tbk. (MTEL) recorded a remarkable of Compound Annual Growth Rate (CAGR), achieving double-digit growth in the 2017-2022 period. This growth exceeds the CAGR of other telecommunication tower issuers. Analysts recommend investment in Mitratel shares due to its promising financial performance and the company’s plans to offer higher dividends at the 2022 Annual General Meeting of Shareholders (AGMS).
Theodorus Ardi Hartoko, the President Director of Mitratel, elaborated that this double-digit CAGR growth exemplifies Mitratel’s sustainable financial performance, providing a solid foundation to bolster the company’s business growth in the future.
“We make a commitment to emphasizing asset monetization to accelerate sustainable tower expansion across Indonesia through acquisitions. We are also innovating in developing the tower business ecosystem, including fiber optics which will create a sustainable business model in the digital era. “We are optimistic that future performance will be better,” said Theodorus Ardi Hartoko, familiarly known as Teddy, to journalists in Jakarta on Monday (10/4/2023)
Additionally, Mitratel also recorded an EBITDA CAGR of 27%. “This company’s achievement is recognized higher than the industry average EBITDA CAGR.” MItratel’s CAGR growth jumped double digits because the company succeeded in improving optimal financial performance,” said Teddy.
He again stated that Mitratel this year has launched a roadmap for organic and inorganic growth by capital expenditure (capex) around IDR 7 trillion to support digital transformation and develop the tower business ecosystem by increasing the number of telecommunications towers, fiber optics and other supporting infrastructure. which has the potential to increase the company’s revenue and net profit in the future.
Cheaper Valuation
On a different occasion, Robertus Hardy, Senior Research Analyst at PT Mirae Asset Sekuritas Indonesia, said that telecommunications infrastructure shares are prospective shares this year because we are approaching the general election period in 2024. This is projected to have an impact on a surge in data traffic.
In addition, the performance of telecommunications infrastructure issuers is supported by wider adoption of 5G technology, fixed broadband penetration, and competition for telecommunications service providers to improve the quality of their services. “Thus, we initiated this industry with an overweight rating with MTEL as the primary choice. Apart from the relatively healthier balance sheet with only 33.0% net gearing as of December 2022 compared to TOWR and TBIG which were 309.5% and 224.3% respectively,” said Robertus in his research.
Therefore, continued Robertus, MTEL not only could pay higher dividends, but also has the ability to spend more of capital expenditure to increase the number of tower assets, through build-to-suite or acquisitions.
MTEL’s assets have a cheap valuation, the enterprise value (EV) / tower ratio as of December 2022 is worth IDR 2 billion. “This is more than a 35% discount from TOWR and TBIG whose EV / tower is IDR 3.1 billion and IDR 3.3 billion respectively,” said Robertus.
Then, Mitratel does not have exposure to the risk of foreign currency fluctuations because all loans are denominated in rupiah. The company’s debt last year fell to IDR 15.29 trillion from IDR 18.07 trillion. The debt-to-equity ratio (DER) in 2022 will decrease to 0.45 times from the previous 0.54 times. Thus, Mitratel has quite room to expand because its DER is decreasing, and its equity last year rose by 0.5% or to IDR 33.80 trillion.
The company is optimistic that business prospects in 2023 will continue to record growth above the industry average, this is based on MItratel’s solid strategy and business model, supported by organic growth such as increasing collocation (tenancy ratio), and accompanied by organic and inorganic actions to trigger Mitratel to record growth in revenue and net time.
According to data, Mitratel’s revenue CAGR in 2017-22 jumped by IDR 14%. Then, Mitratel’s net profit CAGR jumped by 34% or exceeded the net profit CAGR of TOWR and TBIG in the 2017-2022 period, which were 10% and minus 6% respectively.
In the future, MTEL will continue to take several strategic steps. The company will focus on providing upstream to downstream solutions to customers such as fiber to the tower, power to the tower, and energy as a service. MTEL is believed to be aggressive in monetizing telecommunications tower assets, “We like Mitratel because of its position as a leader in the telecommunications tower sector with 25,418 tower ownership under management as of December 2022,” said Robertus.
As of December 2022 data, Indonesia has 127.8 cellular users per 100 residents. With a population of more than 275 million people as of September 2022, Indonesia is the fourth largest country in the world after India (1.42 billion), China (1.41 billion), and the US (333 million). Therefore, this huge market potential has succeeded in attracting several large telecommunications tower provider companies to invest to strengthen market share in this segment.
