Bakrie Telecom (BTEL) - Bottom Line Boosted by Non-cash Items

Bakrie Telecom (BTEL) – Maintain HOLD
Price: Rp245 – Target Price: Rp250

Bottom Line Boosted by Non-cash Items

  • BTEL’s 9M10 net profit grew by 52.7% YoY while revenue slightly up by 2%.
  • BTEL’s 9M10 revenue and EBITDA came below expectation, accounts for only 63% of FY estimate.
  • Strong bottom line was driven by higher forex gain and the recognition of excess frequency cost.
  • Lower than expected top line mainly due to lower ARPU in 9M10.
  • Cut our ‘10F-‘12F ARPU by 3-9%, brought revenue and earnings down by 7-11% and 45%.
  • New TP at Rp250. BTEL is trading at a demanding valuation ‘11F PER of 62.9x. Maintain Hold.