Solusi Sinergi Digital (WIFI IJ)

IRA Officially Launched; Poised for Acceleration

• IRA World Cup promo could drive demand, though capped by early-stage BTS deployment; we trim FY26F FWA revenue by -24%.
• 1Q26 advances and inventories surged Rp1.65tr qoq, implying Rp1.8tr economic capex and signaling 2H acceleration deployment.
• We maintain Buy rating with a lower TP of Rp4,100; management flagged a syndicated loan pipeline to fund FWA deployment.

IRA launch acts as acquisition uplift with back-ended monetization

WIFI commercially launched IRA following a soft deployment in Feb26, with 200k paying subscribers and 236 active BTS in 1Q26. The rollout is supported by a World Cup promotion (see Exh. 5): customers pay Rp100k upfront and receive 3 months of free internet + FolaPlay access (IRSX's OTT, in partnership with TVRI as broadcast rights holder). We view this as a strong acquisition tool, though revenue remains structurally backloaded. Monetization upside is also capped by the early-stage site pipeline, with 550 active BTS currently against a FY26F target of 5,500. Consequently, we trim FY26F FWA revenue by 24% to Rp749bn, while keeping FTTH at Rp2.1tr, for total revenue of Rp3.8tr.

Heavy pre-stocking in 1Q26 signals 2H acceleration

1Q26 book capex of Rp181bn appears soft, but advances and inventories surged Rp685bn and Rp969bn qoq, implying Rp1.8tr economic capex and confirming procurement is underway ahead of a 2H26 installation push. We raise FY26F capex by +8% to Rp4.5tr alongside an increase in our FWA subscriber target to 2.5mn. On profitability, we now forecast FY26F EBITDA at Rp1,847bn (+9.1% vs. prior), as FY25 and 1Q26 run-rates came in better than expected on network operations and G&A. Though margin compresses to 48.6% on front-loaded cost lines including spectrum BHP, network leasing, and distributor fees, we look for normalization from FY27F with EBITDA margin at 54.1% sustained into FY28F.

Maintain Buy, TP revised to Rp4,100; new financing in the pipeline

We maintain Buy (Tactical 3M: OW), supported by undemanding valuation at 7.3x 26F EV/EBITDA and 1Q26 inventory build signaling genuine deployment acceleration. We lower our TP to Rp4,100, reflecting a more conservative terminal value amid higher market risk and still-evolving visibility on long-term monetization. Our TP is derived from a blended DCF/peer-multiple approach (12.9% WACC/ 11.0x 26F EV/EBITDA for regional fiber broadband/Infraco peers), implying 13.3x 26F EV/EBITDA at TP. On financing, management has flagged a syndicated bank loan pipeline; we incorporate this into our model, forecasting FY26F DER/ND-to-EBITDA at 1.0x/1.5x. Key risks include post-promo churn.

… Read More 20260529 WIFI