Telkom Indonesia (TLKM.IJ Rp3,160; BUY TP Rp4,000) Potential Icon+ Consolidation to Reignite Infranexia’s Value Unlocking Story

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Telkom Indonesia (TLKM IJ)

Potential Icon+ Consolidation to Reignite Infranexia’s Value Unlocking Story

We view the planned consolidation of PLN Icon Plus fiber as a post-restatement repositioning to rebuild scale and restore growth.
PLN Icon Plus’ 400k km fiber network and 1.2mn HC could add meaningful scale, with an estimated Rp2.6tr EBITDA contribution.
This move supports further value unlock, with a targeted sell-down at 9-12x EV/EBITDA, we estimate fair value at Rp4,100-4,500.

Reinforcing fiber base to enhance post-restatement investment appeal

TLKM has received direction from Danantara to consolidate fiber assets from PLN Icon Plus, based on media report. While this aligns with the broader objective of streamlining overlapping SOE infrastructure, we believe the initiative also serves a strategic purpose in enhancing InfraNexia’s investment profile following the recent fiber asset restatement, which may have reduced perceived organic growth headroom. We expect the addition of PLN’s fiber assets to restore scale and strengthen monetization potential for strategic investor entry. The consolidation may shift the timing of partner entry into the next year, although engagement with potential investors is likely to continue in parallel as the asset base is further strengthened.

PLN Icon plus adds material scale to Infranexia’s expansion

PLN Icon Plus operates an extensive fiber network spanning over 400k km nationwide, supporting 1.2mn home-connect and 2.7mn home-passes, while also serving enterprises, government, and PLN’s internal electricity-related connectivity. As of FY24, the company recorded total revenue of Rp6.9tr, of which Rp4.9tr was from telco services. In 1H25, total revenue reached Rp3.6tr, with estimated telco revenue of Rp2.7tr. On an annualized basis, we estimate FY25F telco revenue /EBITDA at Rp5.4tr /Rp2.6tr. This implies that PLN Icon Plus could contribute c.26% incremental EBITDA relative to InfraNexia’s standalone base.

Maintain Buy, TP: Rp4,000; Value unlock from consolidation plan

We maintain our Buy rating with a TP of Rp4,000, based on +1SD of 5.8x EV/EBITDA, blended with DCF. At this stage, the discussions appear to be more focused on asset consolidation rather than corporate acquisitions. While the ultimate impact will depend on consolidation structure, assuming PLN Icon Plus fiber assets are injected and fully consolidated into Infranexia, we estimate proforma EBITDA to reach Rp12.7tr. With TLKM targeting to sell 20-30% stake in Infranexia at 9-12x EV/EBITDA, we estimate potential upside to TLKM’s fair value at Rp4,100-4,500 (Exh. 5). Key risk includes larger-than-expected fiber asset value adjustments / impairments.

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