Intrinsic value of Telekomunikasi Indonesia ADR - TLK

Previous Close

$30.23

  Intrinsic Value

$50.78

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  Rating & Target

str. buy

+68%

Previous close

$30.23

 
Intrinsic value

$50.78

 
Up/down potential

+68%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of TLK stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Telekomunikasi Indonesia ADR (TLK) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  13.53
  10.90
  10.31
  9.78
  9.30
  8.87
  8.48
  8.14
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
  6.50
  6.35
  6.21
  6.09
  5.98
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
  5.28
Revenue, $m
  8,686
  9,633
  10,626
  11,665
  12,750
  13,881
  15,059
  16,284
  17,558
  18,881
  20,257
  21,687
  23,172
  24,717
  26,324
  27,995
  29,735
  31,547
  33,435
  35,402
  37,455
  39,596
  41,831
  44,166
  46,605
  49,155
  51,821
  54,609
  57,527
  60,581
  63,779
Variable operating expenses, $m
 
  4,903
  5,408
  5,936
  6,488
  7,064
  7,663
  8,286
  8,934
  9,607
  10,307
  11,031
  11,786
  12,572
  13,389
  14,240
  15,124
  16,046
  17,006
  18,007
  19,051
  20,140
  21,277
  22,465
  23,705
  25,002
  26,358
  27,777
  29,261
  30,814
  32,441
Fixed operating expenses, $m
 
  1,405
  1,440
  1,476
  1,513
  1,551
  1,590
  1,630
  1,670
  1,712
  1,755
  1,799
  1,844
  1,890
  1,937
  1,986
  2,035
  2,086
  2,138
  2,192
  2,247
  2,303
  2,360
  2,419
  2,480
  2,542
  2,605
  2,670
  2,737
  2,806
  2,876
Total operating expenses, $m
  5,761
  6,308
  6,848
  7,412
  8,001
  8,615
  9,253
  9,916
  10,604
  11,319
  12,062
  12,830
  13,630
  14,462
  15,326
  16,226
  17,159
  18,132
  19,144
  20,199
  21,298
  22,443
  23,637
  24,884
  26,185
  27,544
  28,963
  30,447
  31,998
  33,620
  35,317
Operating income, $m
  2,925
  3,325
  3,778
  4,252
  4,748
  5,266
  5,806
  6,368
  6,953
  7,562
  8,195
  8,857
  9,542
  10,255
  10,997
  11,770
  12,575
  13,415
  14,290
  15,203
  16,157
  17,153
  18,194
  19,282
  20,420
  21,611
  22,857
  24,162
  25,529
  26,961
  28,462
EBITDA, $m
  2,925
  4,290
  4,842
  5,421
  6,025
  6,656
  7,314
  7,998
  8,711
  9,452
  10,222
  11,023
  11,857
  12,724
  13,627
  14,567
  15,546
  16,566
  17,630
  18,740
  19,899
  21,109
  22,373
  23,694
  25,076
  26,521
  28,034
  29,618
  31,276
  33,013
  34,834
Interest expense (income), $m
  -258
  69
  94
  121
  149
  179
  209
  241
  274
  308
  344
  381
  420
  460
  502
  545
  590
  637
  686
  737
  790
  846
  904
  964
  1,027
  1,093
  1,162
  1,234
  1,309
  1,388
  1,470
Earnings before tax, $m
  2,850
  3,256
  3,683
  4,131
  4,599
  5,088
  5,597
  6,127
  6,679
  7,254
  7,851
  8,476
  9,122
  9,795
  10,495
  11,225
  11,985
  12,777
  13,604
  14,466
  15,367
  16,307
  17,290
  18,318
  19,393
  20,518
  21,695
  22,928
  24,220
  25,573
  26,992
Tax expense, $m
  674
  879
  994
  1,115
  1,242
  1,374
  1,511
  1,654
  1,803
  1,959
  2,120
  2,288
  2,463
  2,645
  2,834
  3,031
  3,236
  3,450
  3,673
  3,906
  4,149
  4,403
  4,668
  4,946
  5,236
  5,540
  5,858
  6,191
  6,539
  6,905
  7,288
Net income, $m
  1,443
  2,377
  2,689
  3,016
  3,357
  3,714
  4,086
  4,473
  4,876
  5,295
  5,731
  6,187
  6,659
  7,150
  7,662
  8,194
  8,749
  9,327
  9,931
  10,560
  11,218
  11,904
  12,622
  13,372
  14,157
  14,978
  15,838
  16,738
  17,681
  18,669
  19,704

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,332
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  13,411
  12,287
  13,553
  14,879
  16,263
  17,705
  19,208
  20,770
  22,395
  24,083
  25,838
  27,661
  29,557
  31,527
  33,576
  35,708
  37,927
  40,238
  42,646
  45,156
  47,774
  50,505
  53,356
  56,334
  59,446
  62,698
  66,098
  69,655
  73,377
  77,272
  81,350
Adjusted assets (=assets-cash), $m
  11,079
  12,287
  13,553
  14,879
  16,263
  17,705
  19,208
  20,770
  22,395
  24,083
  25,838
  27,661
  29,557
  31,527
  33,576
  35,708
  37,927
  40,238
  42,646
  45,156
  47,774
  50,505
  53,356
  56,334
  59,446
  62,698
  66,098
  69,655
  73,377
  77,272
  81,350
Revenue / Adjusted assets
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
  0.784
Average production assets, $m
  8,678
  9,623
  10,615
  11,653
  12,737
  13,867
  15,044
  16,268
  17,540
  18,862
  20,237
  21,665
  23,149
  24,692
  26,297
  27,967
  29,705
  31,515
  33,401
  35,367
  37,417
  39,556
  41,790
  44,122
  46,559
  49,106
  51,769
  54,555
  57,470
  60,521
  63,715
Working capital, $m
  593
  -1,474
  -1,626
  -1,785
  -1,951
  -2,124
  -2,304
  -2,491
  -2,686
  -2,889
  -3,099
  -3,318
  -3,545
  -3,782
  -4,028
  -4,283
  -4,549
  -4,827
  -5,115
  -5,417
  -5,731
  -6,058
  -6,400
  -6,757
  -7,131
  -7,521
  -7,929
  -8,355
  -8,802
  -9,269
  -9,758
Total debt, $m
  2,374
  2,696
  3,463
  4,265
  5,102
  5,975
  6,884
  7,829
  8,812
  9,833
  10,895
  11,998
  13,145
  14,337
  15,577
  16,866
  18,209
  19,607
  21,064
  22,582
  24,166
  25,819
  27,544
  29,345
  31,228
  33,195
  35,252
  37,404
  39,656
  42,013
  44,480
Total liabilities, $m
  7,110
  7,433
  8,200
  9,002
  9,839
  10,712
  11,621
  12,566
  13,549
  14,570
  15,632
  16,735
  17,882
  19,074
  20,314
  21,603
  22,946
  24,344
  25,801
  27,319
  28,903
  30,556
  32,281
  34,082
  35,965
  37,932
  39,989
  42,141
  44,393
  46,750
  49,217
Total equity, $m
  6,300
  4,853
  5,354
  5,877
  6,424
  6,994
  7,587
  8,204
  8,846
  9,513
  10,206
  10,926
  11,675
  12,453
  13,263
  14,105
  14,981
  15,894
  16,845
  17,837
  18,871
  19,950
  21,076
  22,252
  23,481
  24,766
  26,109
  27,514
  28,984
  30,522
  32,133
Total liabilities and equity, $m
  13,410
  12,286
  13,554
  14,879
  16,263
  17,706
  19,208
  20,770
  22,395
  24,083
  25,838
  27,661
  29,557
  31,527
  33,577
  35,708
  37,927
  40,238
  42,646
  45,156
  47,774
  50,506
  53,357
  56,334
  59,446
  62,698
  66,098
  69,655
  73,377
  77,272
  81,350
Debt-to-equity ratio
  0.377
  0.560
  0.650
  0.730
  0.790
  0.850
  0.910
  0.950
  1.000
  1.030
  1.070
  1.100
  1.130
  1.150
  1.170
  1.200
  1.220
  1.230
  1.250
  1.270
  1.280
  1.290
  1.310
  1.320
  1.330
  1.340
  1.350
  1.360
  1.370
  1.380
  1.380
Adjusted equity ratio
  0.364
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395
  0.395

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,443
  2,377
  2,689
  3,016
  3,357
  3,714
  4,086
  4,473
  4,876
  5,295
  5,731
  6,187
  6,659
  7,150
  7,662
  8,194
  8,749
  9,327
  9,931
  10,560
  11,218
  11,904
  12,622
  13,372
  14,157
  14,978
  15,838
  16,738
  17,681
  18,669
  19,704
Depreciation, amort., depletion, $m
  0
  965
  1,065
  1,168
  1,277
  1,390
  1,507
  1,630
  1,757
  1,889
  2,027
  2,166
  2,315
  2,469
  2,630
  2,797
  2,971
  3,152
  3,340
  3,537
  3,742
  3,956
  4,179
  4,412
  4,656
  4,911
  5,177
  5,455
  5,747
  6,052
  6,371
Funds from operations, $m
  2,646
  3,342
  3,753
  4,184
  4,634
  5,104
  5,593
  6,103
  6,633
  7,185
  7,758
  8,354
  8,974
  9,620
  10,291
  10,991
  11,720
  12,479
  13,271
  14,097
  14,959
  15,860
  16,801
  17,784
  18,813
  19,889
  21,015
  22,193
  23,428
  24,721
  26,076
Change in working capital, $m
  -880
  -145
  -152
  -159
  -166
  -173
  -180
  -187
  -195
  -203
  -210
  -219
  -227
  -236
  -246
  -256
  -266
  -277
  -289
  -301
  -314
  -328
  -342
  -357
  -373
  -390
  -408
  -427
  -446
  -467
  -489
Cash from operations, $m
  3,526
  3,487
  3,905
  4,343
  4,800
  5,277
  5,773
  6,290
  6,828
  7,387
  7,969
  8,572
  9,201
  9,856
  10,537
  11,247
  11,986
  12,756
  13,560
  14,398
  15,273
  16,188
  17,143
  18,142
  19,186
  20,279
  21,422
  22,620
  23,874
  25,188
  26,565
Maintenance CAPEX, $m
  0
  -868
  -962
  -1,062
  -1,165
  -1,274
  -1,387
  -1,504
  -1,627
  -1,754
  -1,886
  -2,024
  -2,166
  -2,315
  -2,469
  -2,630
  -2,797
  -2,971
  -3,152
  -3,340
  -3,537
  -3,742
  -3,956
  -4,179
  -4,412
  -4,656
  -4,911
  -5,177
  -5,455
  -5,747
  -6,052
New CAPEX, $m
  -2,182
  -945
  -992
  -1,038
  -1,084
  -1,130
  -1,176
  -1,224
  -1,272
  -1,322
  -1,374
  -1,428
  -1,484
  -1,543
  -1,605
  -1,670
  -1,738
  -1,810
  -1,886
  -1,966
  -2,050
  -2,139
  -2,233
  -2,332
  -2,437
  -2,547
  -2,663
  -2,786
  -2,915
  -3,051
  -3,194
Cash from investing activities, $m
  -2,058
  -1,813
  -1,954
  -2,100
  -2,249
  -2,404
  -2,563
  -2,728
  -2,899
  -3,076
  -3,260
  -3,452
  -3,650
  -3,858
  -4,074
  -4,300
  -4,535
  -4,781
  -5,038
  -5,306
  -5,587
  -5,881
  -6,189
  -6,511
  -6,849
  -7,203
  -7,574
  -7,963
  -8,370
  -8,798
  -9,246
Free cash flow, $m
  1,468
  1,674
  1,951
  2,243
  2,551
  2,873
  3,210
  3,562
  3,929
  4,311
  4,708
  5,121
  5,551
  5,998
  6,463
  6,947
  7,451
  7,976
  8,522
  9,092
  9,686
  10,307
  10,954
  11,630
  12,337
  13,076
  13,849
  14,657
  15,504
  16,390
  17,319
Issuance/(repayment) of debt, $m
  -230
  728
  766
  802
  837
  873
  909
  945
  983
  1,022
  1,062
  1,103
  1,147
  1,192
  1,240
  1,290
  1,343
  1,398
  1,457
  1,519
  1,584
  1,652
  1,725
  1,802
  1,882
  1,967
  2,057
  2,152
  2,252
  2,357
  2,467
Issuance/(repurchase) of shares, $m
  243
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -500
  728
  766
  802
  837
  873
  909
  945
  983
  1,022
  1,062
  1,103
  1,147
  1,192
  1,240
  1,290
  1,343
  1,398
  1,457
  1,519
  1,584
  1,652
  1,725
  1,802
  1,882
  1,967
  2,057
  2,152
  2,252
  2,357
  2,467
Total cash flow (excl. dividends), $m
  960
  2,403
  2,717
  3,045
  3,388
  3,746
  4,119
  4,507
  4,912
  5,332
  5,770
  6,224
  6,697
  7,190
  7,703
  8,237
  8,793
  9,374
  9,979
  10,611
  11,270
  11,959
  12,679
  13,432
  14,219
  15,043
  15,906
  16,809
  17,755
  18,747
  19,786
Retained Cash Flow (-), $m
  -705
  -479
  -500
  -524
  -547
  -570
  -593
  -617
  -642
  -667
  -693
  -720
  -749
  -778
  -809
  -842
  -877
  -913
  -951
  -991
  -1,034
  -1,079
  -1,126
  -1,176
  -1,229
  -1,285
  -1,343
  -1,405
  -1,470
  -1,539
  -1,611
Prev. year cash balance distribution, $m
 
  1,926
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  3,849
  2,217
  2,522
  2,842
  3,176
  3,526
  3,890
  4,270
  4,665
  5,077
  5,504
  5,949
  6,412
  6,893
  7,395
  7,917
  8,461
  9,028
  9,619
  10,236
  10,880
  11,553
  12,256
  12,990
  13,759
  14,563
  15,404
  16,285
  17,208
  18,175
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  3,691
  2,029
  2,195
  2,340
  2,462
  2,559
  2,628
  2,669
  2,680
  2,661
  2,614
  2,538
  2,438
  2,314
  2,171
  2,012
  1,841
  1,663
  1,481
  1,301
  1,125
  959
  803
  662
  535
  425
  331
  252
  188
  137
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk offers telecommunications and network services. The Company's segments include Corporate, Home, Personal and Others. The Corporate segment provides telecommunications services, including interconnection, leased lines, satellite, contact center, broadband access, information technology services, and data and Internet services to companies and institutions. The Home segment provides fixed wireline telecommunications services, pay television, and data and Internet services to home customers. The Personal segment provides mobile cellular and fixed wireless telecommunications services to individual customers. The Others segment provides building management services. The Company's postpaid mobile services are marketed under the kartuHalo brand, and its prepaid services are marketed under the simPATI, Kartu As and Loop brands. The Company operates its e-money business under the T-cash brand name.

FINANCIAL RATIOS  of  Telekomunikasi Indonesia ADR (TLK)

Valuation Ratios
P/E Ratio 2075.3
Price to Sales 344.8
Price to Book 475.3
Price to Tangible Book
Price to Cash Flow 849.3
Price to Free Cash Flow 2228.2
Growth Rates
Sales Growth Rate 13.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 4.4%
Cap. Spend. - 3 Yr. Gr. Rate 6.8%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 31.2%
Total Debt to Equity 37.7%
Interest Coverage -10
Management Effectiveness
Return On Assets 9.7%
Ret/ On Assets - 3 Yr. Avg. 9.4%
Return On Total Capital 17.1%
Ret/ On T. Cap. - 3 Yr. Avg. 16.5%
Return On Equity 24.3%
Return On Equity - 3 Yr. Avg. 22.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 70.4%
Gross Margin - 3 Yr. Avg. 69.7%
EBITDA Margin 29.8%
EBITDA Margin - 3 Yr. Avg. 29.2%
Operating Margin 33.7%
Oper. Margin - 3 Yr. Avg. 32.6%
Pre-Tax Margin 32.8%
Pre-Tax Margin - 3 Yr. Avg. 31.7%
Net Profit Margin 16.6%
Net Profit Margin - 3 Yr. Avg. 15.9%
Effective Tax Rate 23.6%
Eff/ Tax Rate - 3 Yr. Avg. 25%
Payout Ratio 58%

TLK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TLK stock intrinsic value calculation we used $8686 million for the last fiscal year's total revenue generated by Telekomunikasi Indonesia ADR. The default revenue input number comes from 2016 income statement of Telekomunikasi Indonesia ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TLK stock valuation model: a) initial revenue growth rate of 10.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for TLK is calculated based on our internal credit rating of Telekomunikasi Indonesia ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Telekomunikasi Indonesia ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TLK stock the variable cost ratio is equal to 50.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1371 million in the base year in the intrinsic value calculation for TLK stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Telekomunikasi Indonesia ADR.

Corporate tax rate of 27% is the nominal tax rate for Telekomunikasi Indonesia ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TLK stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TLK are equal to 99.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Telekomunikasi Indonesia ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TLK is equal to -15.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $6300 million for Telekomunikasi Indonesia ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1023.9 million for Telekomunikasi Indonesia ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Telekomunikasi Indonesia ADR at the current share price and the inputted number of shares is $31.0 billion.

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COMPANY NEWS

▶ Where the Bulls Run Fastest: Emerging Stock Markets   [Jun-02-17 06:00AM  Investopedia]
▶ Telkom Indonesia Earnings: It's All About the Data Customer   [Nov-14-16 04:28PM  at Motley Fool]
▶ VICE Media Announces Launch of VICE Indonesia   [Nov-08-16 03:48PM  ACN Newswire]
▶ [$$] BlackBerry Juices Indonesia's Plans to Grow Smartphone Supply Chain   [Oct-16-16 06:46AM  at The Wall Street Journal]
▶ [$$] If You're Hot for Pokemon Go Then Look Over Here   [Jul-28-16 12:01AM  at Barrons.com]
▶ Telkom Indonesia's 2015 Annual Report on Form 20-F   [Jun-17-16 11:37AM  PR Newswire]
▶ How Did Telkom Indonesia Do in 2015?   [Apr-14-16 03:49PM  at Motley Fool]
▶ Can Netflix, Inc. Overcome This New Threat in Indonesia?   [Apr-01-16 03:41PM  at Motley Fool]
▶ [$$] Indonesia Puts Squeeze on Foreign Tech Companies   [07:54AM  at The Wall Street Journal]
▶ Uzone.id Launches Newly Redesigned Web Interface   [Feb-19-16 07:27PM  ACN Newswire]
▶ Why Facebook Just Crushed Earnings Tech Roundup   [Jan-27-16 06:15PM  at TheStreet]
▶ Netflix in Indonesia just hit a major barrier   [07:32AM  at MarketWatch]
▶ Here is What Hedge Funds Think About Analog Devices, Inc. (ADI)   [Dec-01  10:41AM  at Insider Monkey]
▶ Here Is What Hedge Funds Think About Tyson Foods, Inc. (TSN)   [Nov-27  03:14AM  at Insider Monkey]
▶ Hedge Funds Turning The Lights Out On Spectra Energy Corp. (SE)   [Nov-21  03:16PM  at Insider Monkey]
▶ Syniverse Extends LTE Roaming Reach for Telin   [Oct-01  04:00AM  Business Wire]
▶ A Telecom Stock That Can Rise 30% in the Next Year   [Jul-29  09:40PM  at Barrons.com]
▶ Profit From Smartphone Boom in Indonesia   [Feb-25  12:01AM  at Barrons.com]
Financial statements of TLK
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