Listed Company Analysis – FREN

Listed Company Analysis – FREN

Opening

Here we go for another listed company from the telecom industry in Indonesia. This company is well known for the CDMA tech, even until now the CDMA-era has stopped. The branding still sticks to the brand-name until now (for some people). I bet you already know the company, its listed code in IHSG is FREN.

Company Information

FREN Cover

FREN’s company name is PT Smartfren Telecom Tbk, commonly known as Smartfren. FREN is an Indonesia-based wireless network operator headquartered in Central Jakarta. It is owned by Indonesian conglomerate Sinar Mas under the company PT Sinar Mas Komunikasi Teknologi. Smartfren operates exclusively using a 4G LTE network after shifting away from CDMA technologies in 2014. As of 2018, Smartfren has 10.1 million active subscribers, making them the fifth-largest wireless carrier in the country. Aside from telco services, FREN also actively operates in general trading. Based on the current shareholders, the majority stakes held by PT Global Nusa Data 36.60%, PT Wahana Inti Nusantara 22.34%, and PT Bali Media Komunikasi 14.81%. President Commissioner in charge is Darmin Nasution, with Merza Fachys as the President Director. FREN IPO-ed on 29 Nov 2006 with initial price at IDR 225/share. PT Bhakti Securities, PT CIMB-GK Securities Indonesia, and PT Danareksa Sekuritas are the underwriters.

Key Financial Statistics

Pictures provided.

FREN Financial Statement
FREN Financial Ratios

Highlights of 2020

  • As of 30 June 2020, FREN’s customer increase about 46% to 26 Million Users. Dominated by medium-low segment customers.
  • FREN keeps gearing up the expansion with Capex USD 250 Mio for 2020. USD 180 Mio has been spent in the first semester. 
  • Most of Capex focused on building more BTS (base transceiver station) with current BTS at 35.600 Units. Increase 4.500 units since the end of 2019.
  • Smartfren launched its own digital sub-brand “Switch.”, a move similar to Telkomsel’s “by.U”. XL also launched add-on “Xtra Unlimited Turbo”
  • The sub-brand is priced competitively despite being priced similarly to Smartfren’s own unlimited plan (Rp50k/30day – entry-level package, priced similar to Smartfren Unlimited Lite – Rp50k/28day).
  • PT Smartfren actively involves as the guarantor for loans from China Development Bank Shenzhen Branch. Loan RMB 1.58 B, six years span. 

Target Price

Hopemity – Buy Rating – 120

Closing

Despite the competitive environment in Indonesia’s Market, FREN keeps pushing through all the odds and cope with its competitors. Solely focused to provide unlimited internet for everyone, make FREN boldly spent huge Capex even resulting in a net loss in the company. FREN is aiming high to capitalize on the Indonesian market, and when its matured to capture it. The stock will go up eventually, the plummet season is going to stop soon, its either to become stay in 80ish or soar to 120ish. #choose-wisely 


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