PT Communication Cable Systems Indonesia Tbk

Company and Industry Updates

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 Disclaimer
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Company Overview

Macroeconomics & Industry Analysis

Key Customer

Valuation

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COMPANY OVERVIEW

About The Company Products and Services

Core Business (Fibre Optics):

ADSS dan Figure8 Underground Cable
Armoured Cable FTTH Drop Wire
Microcable Submarine Cable
Fire Resistance Cables
Established 1996
HDPE Pipe Product :
Industry Fiber Optics Manufacturer
Microduct Subduct
Production Capacity/Year Water Pipe Gas Pipe
1.600.000 km
• Manufacture
• Trading
Services :
• Operational and Installation Maintenance Splicing
maintenance services Trainings Testing & Maintenance
Business • Electrical and
telecommunication Leaseable Fiber Optics :
installation Jawa-Bali (24.5Km)
• Fiber Optics Leasing
source : Company Annual Report,pubex 4
 Macroeconomics

INDONESIA Indonesia Internet Profile (in millions)

400 8.6

350
8.4 8.4

8.2 8.2
300

8.0 8.0
250 235
7.8
205 261 286 307
200 7.7
7.6
150
4G penetration (2020) : 64% 7.4 7.4
100
Mobile Internet Speed (2020) : 8.5 mbps 7.2

50 110 97 83 70 7.0
57
0 6.8
2020 2021F 2022F 2023F 2024F

3G Subscriptions (LHS) 4G Subscriptions (LHS) Fixed Broadband Subscriptions (RHS)

• Indonesia internet users are expected to be growing at 4% CAGR from 2020-

2024F, while also we are going to see migration from 3G to 4G.
• Indonesia internet users are heavily concentrated in mobile broadband,
resulting in low penetration in fixed broadband.
• Meanwhile, fixed broadband subscriptions are expected to grow 3.4% CAGR
2020-2024F.

source : Fitch Solution 5

Industry Overview

Base Transceiver Station / 10.000 Population Indonesia 4G Migration

14.3

9.3

7.6
7.1
5.9 6.1 6.1

3.4 3.6

India Indonesia Korea Australia USA Malaysia Thailand Vietnam China

• While Indonesian Government commit to increase Indonesia connectivity, Indonesia is still lacking in terms of
Infrastructure. This will be positive sentiment for Telecommunication related manufacturer and also towers companies.
Currently Indonesia has 3.6 BTS in 10.000 populations, lower than some of ASEAN countries such as Malaysia (7.1),
Thailand (7.6), and Vietnam (9.3).

• Fast development in Telecommunication Industry also pushed customer from 2G and 3G to 4G subscriptions therefore,
migration towards 4G could be new demand for BTS tower to provide 4G BTS tower.

source : Fitch Solution 6

Industry Overview

Indonesia’s Provider Base Transceiver Stations Infrastructure Indonesia’s Provider Base Transceiver Stations (%)
*mostly leased from tower company

107,523 23%
46%
57,089
31%
73,397 66,300
52,892
28,600
50,252 37,805
28,100
Telkomsel XL Axiata Indosat
2G 3G 4G
2G 3G 4G

• While low number of BTS/population is low relative to other countries, the migration in Telecommunication industry also
challenge Indonesia Telecommunication Industry. As of 2021, 2G and 3G BTS still make a large contribution to Indonesia provider’s
infrastructure.

• This can also be a positive signal for fiber optic manufacturer, as potential demand from tower companies to continue the process
of fiberizations.

source : Fitch Solution 7

Industry Overview

Indonesia 4G Subscriptions (in millions) Indonesia Top 3 Telco Provider Capex (in Rp Mn)
327
307
286
261
235
205

2020 2021F 2022F 2023F 2024F 2025F

• The number of 4G subscriber are expected to be growing 9.7% CAGR 2021F-2025F.

• 4G Migration from 2G and 4G has also pushed provider to catch up with the rising demand, investment in the 4G BTS tower
is essential to support the current need.

source : Fitch Solution 8

 Industry Overview

New Palapa Ring Project

Indonesia Government are planning to complete 42.000 Moratelindo has partnered with Indonesia government to
BTS in 2021 and 3.704 BTS in 2022 built Palapa Ring project focusing in West and East
Indonesia. Moratelindo has built 10.710 Km fiber optics.

Indonesian minister of Telecommunication are planning to Moratelindo has been the customer of CCSI, and
integrate Indonesia’s fiber optics, translating to 12.803 Km contribute 15% of total revenue in 2021.
additional of fiber optics in 2022

Indonesian minister of Telecommunication has prepare

CAPEX for construction totaling Rp8.6 trillions for 2022 and
2023.

source : bisnis.com, moratelido 9

 Customers

CCSI Revenue from Key Customers (Rp Billions) CCSI % Revenue from Key Customers
225

92 158 41% 43%

136
42 69%
51
24% 15%
64
133 23%
11%
85 35%
52 19% 19%

2018 2019 2020 2018 2019 2020

PT iForte Solusi Infotek PT Supra Primatama Nusantara PT Mora Telematika Indonesia PT iForte Solusi Infotek PT Supra Primatama Nusantara PT Mora Telematika Indonesia Other

• CCSI has 3 key customer in 2020 which they are PT iForte Solusi Infotek, PT Supra Primatama Nusantara, PT Mora Telematika
Indonesia. They are largely contribute 57% of CCSI’s total revenues.

• PT iForte Solusi Infotek are subsidiary from PT Sarana Menara Nusantara (TOWR.IJ), which are one of the biggest tower
company in Indonesia ,PT Supra Primatama Nusantara is fixed line internet operator company under Biznet Brand, PT Mora
Telematika is telecom infrastructure provider and has been appointed by the government to develop Palapa Ring projects.

source : Company Annual Report 10

 Customers

TOWR’s Capex and Installed Fiber Optics (in Km) TOWR’s Tower Rent and Fiber Lease Revenue
8.00 400
45,000 Rp 4.25T 4.50T 355
Rp 3.76T
7.00 350
40,000 4.00T
300
35,000 3.50T 6.00 300
235
220
30,000 3.00T 5.00 250

25,000 Rp 2.13T 2.50T

4.00 200
20,000
42,554 2.00T 6.97
3.00 5.85 150
15,000 1.50T 5.00 5.34
27,527
2.00 100
10,000 1.00T
1.00 50
5,000 9,400 0.50T

- 0.00T 0.00 0
2018 2019 2020 2017 2018 2019 2020

Fiber Optics Installed (LHS) CAPEX (RHS) Tower Rent (Rp TN, LHS) MWIFO (Rp Bn. RHS)

• PT Sarana Menara Nusantara as one of the biggest player in telecom tower has been keen to do fiberization as telecom
provider need to capture 4G customer. Hence, the capital expenditure by TOWR has also been increasing and put more focus
on fiberization.
• In 2022, TOWR has planned Rp3.25 trillion worth of CAPEX with distribution of 60% on tower segment and 40% non-tower
segment.
• Focus on the fiberization has also made TOWR revenue from MWIFO grew significantly. Throughout 2017-2020, this segment
alone has grew 17.3% CAGR.

source : TOWR Annual Report 11

APPENDIX

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Appendix : Financial Projection

CCSI Projected Revenue CCSI Projected Gross Profit

CAGR : 29.7% 1,032

CAGR : 30.6% 291

794 224

625 176

500 141
410 113

282 76

2020 2021F 2022F 2023F 2024F 2025F 2020 2021F 2022F 2023F 2024F 2025F
*in Billion Rupiah *in Billion Rupiah

source : Marvel Investama Estimates 13

Appendix : Financial Projection

CCSI Projected EBITDA CCSI Projected Net Income

237 152
CAGR : 35.2% CAGR : 39.7%

179 115

137 87
122 79
71
93

52
29

2020 2021F 2022F 2023F 2024F 2025F 2020 2021F 2022F 2023F 2024F 2025F
*in Billion Rupiah *in Billion Rupiah

source : Marvel Investama Estimates 14

Appendix : Indicative Valuation

(in thousand rupiah)

FOOTBALL FIELD ANALYSIS

Rp628 Rp918

Rp475 Rp792
*Price target : Rp 782

Rp588 Rp832

Rp 628 Rp 792

source : Marvel Investama Estimates 15

Appendix : Key Fiancial Metrics

Projected Financial Metrics

2021F 2022F 2023F 2024F 2025F

GPM 28% 26% 27% 27% 27%

EBITDA 23% 24% 22% 23% 23%

NPM 17% 16% 14% 14% 15%

ROA 13% 12% 11% 13% 14%

ROE 19% 18% 17% 21% 23%

source : Marvel Investama Estimates 16

THANK YOU

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