Intrinsic value of Telekomunikasi Indonesia ADR - TLK

Previous Close

$27.39

  Intrinsic Value

$0.56

stock screener

  Rating & Target

str. sell

-98%

Previous close

$27.39

 
Intrinsic value

$0.56

 
Up/down potential

-98%

 
Rating

str. sell

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.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2,760.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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, %
  16.10
  14.99
  13.99
  13.09
  12.28
  11.55
  10.90
  10.31
  9.78
  9.30
  8.87
  8.48
  8.13
  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
Revenue, $m
  9,986
  11,483
  13,089
  14,803
  16,621
  18,541
  20,562
  22,682
  24,900
  27,216
  29,630
  32,143
  34,758
  37,477
  40,302
  43,239
  46,290
  49,461
  52,758
  56,187
  59,755
  63,468
  67,336
  71,365
  75,565
  79,945
  84,516
  89,287
  94,270
  99,477
Variable operating expenses, $m
  5,329
  6,124
  6,978
  7,888
  8,854
  9,875
  10,949
  12,075
  13,253
  14,484
  15,744
  17,079
  18,469
  19,913
  21,415
  22,975
  24,596
  26,281
  28,033
  29,855
  31,751
  33,724
  35,779
  37,920
  40,151
  42,479
  44,908
  47,443
  50,091
  52,857
Fixed operating expenses, $m
  1,160
  1,185
  1,212
  1,238
  1,265
  1,293
  1,322
  1,351
  1,381
  1,411
  1,442
  1,474
  1,506
  1,539
  1,573
  1,608
  1,643
  1,679
  1,716
  1,754
  1,793
  1,832
  1,872
  1,913
  1,956
  1,999
  2,043
  2,087
  2,133
  2,180
Total operating expenses, $m
  6,489
  7,309
  8,190
  9,126
  10,119
  11,168
  12,271
  13,426
  14,634
  15,895
  17,186
  18,553
  19,975
  21,452
  22,988
  24,583
  26,239
  27,960
  29,749
  31,609
  33,544
  35,556
  37,651
  39,833
  42,107
  44,478
  46,951
  49,530
  52,224
  55,037
Operating income, $m
  3,497
  4,173
  4,900
  5,676
  6,501
  7,373
  8,292
  9,256
  10,266
  11,321
  12,444
  13,590
  14,783
  16,024
  17,315
  18,656
  20,051
  21,501
  23,009
  24,578
  26,212
  27,913
  29,685
  31,532
  33,458
  35,468
  37,566
  39,757
  42,047
  44,440
EBITDA, $m
  4,471
  5,289
  6,169
  7,108
  8,106
  9,161
  10,272
  11,438
  12,659
  13,935
  15,265
  16,650
  18,092
  19,592
  21,151
  22,772
  24,457
  26,210
  28,032
  29,927
  31,900
  33,955
  36,095
  38,326
  40,652
  43,079
  45,612
  48,257
  51,021
  53,910
Interest expense (income), $m
  -258
  202
  300
  405
  518
  639
  767
  902
  1,044
  1,193
  1,349
  1,512
  1,682
  1,859
  2,043
  2,234
  2,433
  2,639
  2,854
  3,077
  3,309
  3,551
  3,802
  4,063
  4,335
  4,618
  4,914
  5,222
  5,544
  5,880
  6,230
Earnings before tax, $m
  3,295
  3,873
  4,495
  5,158
  5,863
  6,607
  7,390
  8,212
  9,073
  9,972
  10,932
  11,908
  12,925
  13,982
  15,081
  16,223
  17,411
  18,647
  19,932
  21,269
  22,661
  24,111
  25,622
  27,197
  28,840
  30,554
  32,344
  34,213
  36,167
  38,209
Tax expense, $m
  890
  1,046
  1,214
  1,393
  1,583
  1,784
  1,995
  2,217
  2,450
  2,692
  2,952
  3,215
  3,490
  3,775
  4,072
  4,380
  4,701
  5,035
  5,382
  5,743
  6,119
  6,510
  6,918
  7,343
  7,787
  8,250
  8,733
  9,238
  9,765
  10,317
Net income, $m
  2,405
  2,828
  3,281
  3,766
  4,280
  4,823
  5,395
  5,995
  6,623
  7,279
  7,980
  8,693
  9,435
  10,207
  11,009
  11,843
  12,710
  13,612
  14,550
  15,526
  16,543
  17,601
  18,704
  19,854
  21,053
  22,304
  23,611
  24,976
  26,402
  27,893

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  15,386
  17,693
  20,168
  22,809
  25,610
  28,569
  31,683
  34,949
  38,367
  41,935
  45,655
  49,528
  53,557
  57,746
  62,099
  66,623
  71,325
  76,211
  81,292
  86,575
  92,072
  97,794
  103,753
  109,961
  116,433
  123,182
  130,225
  137,577
  145,255
  153,277
Adjusted assets (=assets-cash), $m
  15,386
  17,693
  20,168
  22,809
  25,610
  28,569
  31,683
  34,949
  38,367
  41,935
  45,655
  49,528
  53,557
  57,746
  62,099
  66,623
  71,325
  76,211
  81,292
  86,575
  92,072
  97,794
  103,753
  109,961
  116,433
  123,182
  130,225
  137,577
  145,255
  153,277
Revenue / Adjusted assets
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
Average production assets, $m
  9,506
  10,931
  12,461
  14,092
  15,823
  17,651
  19,575
  21,593
  23,705
  25,909
  28,208
  30,601
  33,090
  35,678
  38,368
  41,163
  44,068
  47,087
  50,226
  53,490
  56,887
  60,422
  64,104
  67,939
  71,938
  76,108
  80,459
  85,002
  89,745
  94,702
Working capital, $m
  -1,128
  -1,298
  -1,479
  -1,673
  -1,878
  -2,095
  -2,324
  -2,563
  -2,814
  -3,075
  -3,348
  -3,632
  -3,928
  -4,235
  -4,554
  -4,886
  -5,231
  -5,589
  -5,962
  -6,349
  -6,752
  -7,172
  -7,609
  -8,064
  -8,539
  -9,034
  -9,550
  -10,089
  -10,653
  -11,241
Total debt, $m
  3,484
  4,709
  6,023
  7,425
  8,913
  10,484
  12,138
  13,872
  15,687
  17,581
  19,557
  21,613
  23,753
  25,977
  28,289
  30,691
  33,188
  35,782
  38,480
  41,285
  44,204
  47,243
  50,407
  53,703
  57,140
  60,724
  64,464
  68,367
  72,444
  76,704
Total liabilities, $m
  8,170
  9,395
  10,709
  12,111
  13,599
  15,170
  16,824
  18,558
  20,373
  22,267
  24,243
  26,299
  28,439
  30,663
  32,975
  35,377
  37,874
  40,468
  43,166
  45,971
  48,890
  51,929
  55,093
  58,389
  61,826
  65,410
  69,149
  73,053
  77,130
  81,390
Total equity, $m
  7,216
  8,298
  9,459
  10,697
  12,011
  13,399
  14,859
  16,391
  17,994
  19,667
  21,412
  23,228
  25,118
  27,083
  29,125
  31,246
  33,451
  35,743
  38,126
  40,604
  43,182
  45,866
  48,660
  51,572
  54,607
  57,773
  61,076
  64,524
  68,125
  71,887
Total liabilities and equity, $m
  15,386
  17,693
  20,168
  22,808
  25,610
  28,569
  31,683
  34,949
  38,367
  41,934
  45,655
  49,527
  53,557
  57,746
  62,100
  66,623
  71,325
  76,211
  81,292
  86,575
  92,072
  97,795
  103,753
  109,961
  116,433
  123,183
  130,225
  137,577
  145,255
  153,277
Debt-to-equity ratio
  0.480
  0.570
  0.640
  0.690
  0.740
  0.780
  0.820
  0.850
  0.870
  0.890
  0.910
  0.930
  0.950
  0.960
  0.970
  0.980
  0.990
  1.000
  1.010
  1.020
  1.020
  1.030
  1.040
  1.040
  1.050
  1.050
  1.060
  1.060
  1.060
  1.070
Adjusted equity ratio
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,405
  2,828
  3,281
  3,766
  4,280
  4,823
  5,395
  5,995
  6,623
  7,279
  7,980
  8,693
  9,435
  10,207
  11,009
  11,843
  12,710
  13,612
  14,550
  15,526
  16,543
  17,601
  18,704
  19,854
  21,053
  22,304
  23,611
  24,976
  26,402
  27,893
Depreciation, amort., depletion, $m
  973
  1,116
  1,269
  1,432
  1,605
  1,788
  1,980
  2,182
  2,393
  2,614
  2,821
  3,060
  3,309
  3,568
  3,837
  4,116
  4,407
  4,709
  5,023
  5,349
  5,689
  6,042
  6,410
  6,794
  7,194
  7,611
  8,046
  8,500
  8,975
  9,470
Funds from operations, $m
  3,379
  3,944
  4,550
  5,198
  5,885
  6,611
  7,375
  8,177
  9,017
  9,893
  10,801
  11,753
  12,744
  13,774
  14,846
  15,959
  17,117
  18,321
  19,573
  20,875
  22,231
  23,643
  25,114
  26,648
  28,247
  29,915
  31,657
  33,476
  35,376
  37,363
Change in working capital, $m
  -156
  -169
  -182
  -194
  -205
  -217
  -228
  -240
  -251
  -262
  -273
  -284
  -295
  -307
  -319
  -332
  -345
  -358
  -373
  -387
  -403
  -420
  -437
  -455
  -475
  -495
  -516
  -539
  -563
  -588
Cash from operations, $m
  3,535
  4,113
  4,732
  5,391
  6,090
  6,828
  7,604
  8,417
  9,267
  10,155
  11,074
  12,037
  13,039
  14,082
  15,165
  16,291
  17,462
  18,679
  19,945
  21,263
  22,634
  24,063
  25,551
  27,103
  28,721
  30,410
  32,173
  34,015
  35,939
  37,951
Maintenance CAPEX, $m
  -819
  -951
  -1,093
  -1,246
  -1,409
  -1,582
  -1,765
  -1,958
  -2,159
  -2,370
  -2,591
  -2,821
  -3,060
  -3,309
  -3,568
  -3,837
  -4,116
  -4,407
  -4,709
  -5,023
  -5,349
  -5,689
  -6,042
  -6,410
  -6,794
  -7,194
  -7,611
  -8,046
  -8,500
  -8,975
New CAPEX, $m
  -1,320
  -1,425
  -1,529
  -1,631
  -1,731
  -1,828
  -1,924
  -2,018
  -2,111
  -2,205
  -2,298
  -2,393
  -2,489
  -2,588
  -2,690
  -2,795
  -2,905
  -3,019
  -3,139
  -3,264
  -3,396
  -3,535
  -3,682
  -3,836
  -3,999
  -4,170
  -4,351
  -4,542
  -4,744
  -4,956
Cash from investing activities, $m
  -2,139
  -2,376
  -2,622
  -2,877
  -3,140
  -3,410
  -3,689
  -3,976
  -4,270
  -4,575
  -4,889
  -5,214
  -5,549
  -5,897
  -6,258
  -6,632
  -7,021
  -7,426
  -7,848
  -8,287
  -8,745
  -9,224
  -9,724
  -10,246
  -10,793
  -11,364
  -11,962
  -12,588
  -13,244
  -13,931
Free cash flow, $m
  1,397
  1,737
  2,109
  2,514
  2,950
  3,417
  3,915
  4,441
  4,996
  5,580
  6,185
  6,824
  7,490
  8,184
  8,907
  9,659
  10,441
  11,253
  12,098
  12,976
  13,889
  14,839
  15,827
  16,857
  17,929
  19,046
  20,211
  21,427
  22,695
  24,020
Issuance/(repayment) of debt, $m
  1,133
  1,225
  1,314
  1,402
  1,488
  1,571
  1,653
  1,734
  1,815
  1,895
  1,975
  2,057
  2,139
  2,224
  2,312
  2,402
  2,497
  2,595
  2,698
  2,806
  2,919
  3,038
  3,164
  3,297
  3,436
  3,584
  3,740
  3,904
  4,077
  4,260
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  1,133
  1,225
  1,314
  1,402
  1,488
  1,571
  1,653
  1,734
  1,815
  1,895
  1,975
  2,057
  2,139
  2,224
  2,312
  2,402
  2,497
  2,595
  2,698
  2,806
  2,919
  3,038
  3,164
  3,297
  3,436
  3,584
  3,740
  3,904
  4,077
  4,260
Total cash flow (excl. dividends), $m
  2,530
  2,962
  3,424
  3,916
  4,438
  4,989
  5,568
  6,176
  6,811
  7,475
  8,160
  8,880
  9,629
  10,409
  11,219
  12,061
  12,937
  13,848
  14,795
  15,781
  16,808
  17,877
  18,992
  20,153
  21,365
  22,630
  23,951
  25,331
  26,773
  28,280
Retained Cash Flow (-), $m
  -993
  -1,082
  -1,161
  -1,238
  -1,314
  -1,388
  -1,460
  -1,532
  -1,603
  -1,674
  -1,745
  -1,816
  -1,890
  -1,965
  -2,042
  -2,122
  -2,205
  -2,292
  -2,383
  -2,478
  -2,578
  -2,684
  -2,795
  -2,912
  -3,035
  -3,165
  -3,303
  -3,448
  -3,601
  -3,762
Prev. year cash balance distribution, $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 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
  1,536
  1,880
  2,263
  2,677
  3,124
  3,601
  4,108
  4,644
  5,208
  5,801
  6,415
  7,064
  7,740
  8,444
  9,177
  9,940
  10,732
  11,556
  12,413
  13,303
  14,230
  15,194
  16,197
  17,242
  18,330
  19,465
  20,648
  21,883
  23,172
  24,518
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
  1,473
  1,721
  1,969
  2,205
  2,421
  2,613
  2,775
  2,902
  2,992
  3,041
  3,047
  3,014
  2,943
  2,835
  2,694
  2,526
  2,335
  2,128
  1,911
  1,690
  1,472
  1,261
  1,062
  878
  713
  568
  443
  339
  253
  185
Current shareholders' claim on cash, %
  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 1880.3
Price to Sales 312.4
Price to Book 430.7
Price to Tangible Book
Price to Cash Flow 769.5
Price to Free Cash Flow 2018.8
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 $8601 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 16.1% 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 53.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1135 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 8.6% 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 95.2%.

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 -11.3%. 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 - $6223 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 100800 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 $2,760.9 billion.

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COMPANY NEWS

▶ Is This the Right Time to Buy Telekomunikasi Indonesia?   [May-21-18 08:47PM  Motley Fool]
▶ 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]
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▶ 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]
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▶ 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]
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▶ 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]
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