ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

In Equity Sales and Research for more than 25 years covering Asian markets. Possesses in-depth knowledge of a wide range of companies, economies, and markets in Asia. Over his career, he has specialised in HK/China and ASEAN markets at various different Investment Banks, most recently heading equities in Indonesia for Bank of America Merrill Lynch in Jakarta for more than three years. Whilst in Jakarta, he produced a well-read daily and weekly product on the Indonesian market, which included company visits, as well as political, economic and sector commentary. A former racing skier, who enjoys ultra-marathons and surfing in his spare time.

ASEAN Insight Provider

LinkNet - Smarter Enterprise - Post Results Follow Up

Linknet - Confounding the Critics with Value Add - Management Call

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Bottom-Up

I was out and about in Jakarta last week and grabbed the opportunity to visit <a href="https://www.smartkarma.com/entities/1050" target="_blank" data-smartkarma-citation="entities:1050:1">Link Net Tbk Pt (LINK IJ)</a> management. LINK through the First Media brand is Indonesia's best quality cable TV and high-speed broadband provider, with a focus on the higher value added subscribers in key cities. Penetration rates are low for both pay TV (10.7%) and broadband (7.7%) and the company has the high-quality network capacity to satisfy this demand, with organic subscriber growth rates of +18-20% and network utilization of only 28% currently. Margins are ticking up as it negotiates better terms with content providers, with ARPUs remaining stable. it is ramping up efforts to upgrade existing customers with a high degree of success. Adding on the mobile broadband "Bolt" service will allow subscribers to take their service to the car (a godsend in Jakarta traffic!) under the same bill. It will expand its geographical reach to Malang, Medan, Batam, and Bali but will continue to be very selective. Other geographies are covered by sister Satellite company BIG TV (15% owned), which targets lower-end subscribers. This stock is not well covered (five brokers), despite being a key proxy to the rising middle class in Indonesia. At some point, CVC (33.5% stake) will look to exit, which will be a key liquidity event. Bloomberg consensus is forecasting 3 year EPS CAGR of 21% and has the stock trading on 14.7x FY17E PER, which is a significant discount to free to air leader <a href="https://www.smartkarma.com/entities/14739" target="_blank" data-smartkarma-citation="entities:14739:1">Surya Citra Media Pt Tbk (SCMA IJ)</a>.

I was out and about in Jakarta last week and grabbed the opportunity to visit Link Net Tbk Pt (LINK IJ) management. LINK through the First Media brand is Indonesia's best quality cable TV and high-speed broadband provider, with a focus on the higher value added subscribers in key cities. Penetration rates are low for both pay TV (10.7%) and broadband (7.7%) and the company has the high-quality network capacity to satisfy this demand, with organic subscriber growth rates of +18-20% and network utilization of only 28% currently. Margins are ticking up as it negotiates better terms with content providers, with ARPUs remaining stable. it is ramping up efforts to upgrade existing customers with a high degree of success. Adding on the mobile broadband "Bolt" service will allow subscribers to take their service to the car (a godsend in Jakarta traffic!) under the same bill. It will expand its geographical reach to Malang, Medan, Batam, and Bali but will continue to be very selective. Other geographies are covered by sister Satellite company BIG TV (15% owned), which targets lower-end subscribers. This stock is not well covered (five brokers), despite being a key proxy to the rising middle class in Indonesia. At some point, CVC (33.5% stake) will look to exit, which will be a key liquidity event. Bloomberg consensus is forecasting 3 year EPS CAGR of 21% and has the stock trading on 14.7x FY17E PER, which is a significant discount to free to air leader Surya Citra Media Pt Tbk (SCMA IJ). 

Linknet (LINK IJ) - King of Cable - On the Ground in J Town