UOBKayhian on 10 Dec 2014
FY14F PE (x): 16.2
FY15F PE (x): 15.5
Telkomsel: Maximising revenue through smart pricing. Competition has eased since the industry consolidated to four players with XL Axiata completing the acquisition of Axis in Mar 14. Telkomsel has raised its pricing for voice and SMS. It utilises smart pricing whereby pricing is adjusted based on the quality of its network and competitive intensity in 206 separate micro clusters. Average revenue per minute (ARPM) for voice inched up by 2.5% yoy to Rp176 in 3Q14 due to the reduction of free bonus minutes. We estimate that average rate per SMS has also increased 8.8% yoy to Rp57.
Re-iterate BUY. SingTel will benefit from growth in Indonesia and India through Telkomsel and Bharti. Regional mobile associates, including contributions from AIS and Globe Telecom, accounted for 45.3% of group pre-tax profit.
SingTel has declared an interim dividend of 6.8 S cents per share. The ex-date for the interim dividend is 19 Dec 14. The stock provides an attractive dividend yield of 4.6%, which is almost 1SD above long-term mean.
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