Investors with an interest in Diversified Communication Services stocks have likely encountered both PT Telekomunikasi (TLK) and Chunghwa (CHT) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, a ...

Group 1 - The core viewpoint is that PT Telekomunikasi Indonesia Tbk (NYSE: TLK) is still considered a "Buy" rated stock, with expectations of improved near-term financial results and potential for stock re-rating [1] - The research service Asia Value & Moat Stocks focuses on identifying Asia-listed stocks that have a significant gap between price and intrinsic value, particularly emphasizing deep value balance sheet bargains and wide moat stocks [1][2] - The investment strategy includes targeting net cash stocks, net-nets, low price-to-book (P/B) stocks, and high-quality businesses that exhibit strong earnings power at a discount [1][2]

Financial Performance - Total revenues for the six months ended June 30, 2025, were IDR 73,004 billion, a decrease of 3.4% compared to IDR 75,292 billion in the same period of 2024[12] - Operating profit for the period was IDR 19,901 billion, down 8.0% from IDR 21,635 billion in the previous year[12] - Profit for the period attributable to owners of the parent company was IDR 10,975 billion, a decrease of 6.7% from IDR 11,761 billion in 2024[12] - Basic earnings per share for the period was IDR 110.79, down from IDR 118.72 in the same period of 2024[12] - The company reported a profit for the period of IDR 14,126 billion for the first half of 2025, compared to IDR 15,424 billion in the same period of 2024, indicating a decrease of about 8.4%[17] Assets and Liabilities - Total current assets decreased to IDR 60,378 billion as of June 30, 2025, from IDR 63,080 billion at the end of 2024, reflecting a decline of 4.3%[11] - Total liabilities increased to IDR 145,435 billion as of June 30, 2025, compared to IDR 137,185 billion at the end of 2024, marking a rise of 6.0%[11] - Total equity decreased to IDR 148,362 billion as of June 30, 2025, down from IDR 162,490 billion at the end of 2024, a decline of 8.7%[11] - The total retained earnings as of June 30, 2025, are IDR 99,520 billion, down from IDR 103,104 billion as of June 30, 2024[15] Cash Flow and Investments - The net cash provided by operating activities for the first half of 2025 is IDR 32,573 billion, an increase from IDR 29,687 billion in the same period of 2024[17] - Cash receipts from customers and other operators decreased to IDR 71,204 billion in 2025 from IDR 72,497 billion in 2024, reflecting a decline of approximately 1.8%[17] - The company incurred cash payments for corporate and final income taxes amounting to IDR 4,466 billion in 2025, a decrease from IDR 6,434 billion in 2024, reflecting a reduction of approximately 30.6%[17] - The net cash used in investing activities decreased to IDR 11,460 billion in 2025 from IDR 14,206 billion in 2024, indicating a reduction of about 19.4%[17] - Proceeds from loans and other borrowings increased significantly to IDR 39,689 billion in 2025 from IDR 24,189 billion in 2024, marking an increase of approximately 64.2%[17] Personnel and Operations - Personnel expenses decreased to IDR 8,075 billion, down 14.9% from IDR 9,485 billion in 2024[12] - As of June 30, 2025, the company had 19,319 employees, a decrease from 19,695 employees as of December 31, 2024[30] - The company continues to focus on enhancing its telecommunications services and expanding its market presence in Indonesia[12] Shareholder Actions - Cash dividends paid to the company's stockholders increased to IDR 21,047 billion in 2025 from IDR 17,683 billion in 2024, representing an increase of approximately 18.5%[17] - The company’s share buyback program reflects a strategic move to enhance shareholder value amidst ongoing market conditions[44] Subsidiaries and Assets - Total assets of PT Telekomunikasi Selular (Telkomsel) as of June 30, 2025, are Rp113,874 billion, down from Rp117,403 billion in December 2024[46] - PT Dayamitra Telekomunikasi (Mitratel) reported total assets of Rp60,076 billion as of June 30, 2025, an increase from Rp58,140 billion in December 2024[46] - The Company has a 100% ownership stake in several subsidiaries, including PT Multimedia Nusantara and PT Telkom Data Ekosistem, with total assets of Rp17,982 billion and Rp8,726 billion respectively as of June 30, 2025[46] Accounting and Financial Reporting - The consolidated financial statements are prepared in accordance with Indonesian Financial Accounting Standards, with amounts expressed in billions of Rupiah[63] - The Group adopted new accounting standards effective January 1, 2025, which did not result in major changes to accounting policies or material effects on reported amounts[67] - The reporting currency for the consolidated financial statements is the Indonesian Rupiah, with certain subsidiaries using other currencies[65] Revenue Recognition - Revenue from mobile services includes cellular service, internet and data service, and SMS, recognized based on actual usage or allowance unit used, indicating a performance-based revenue model[126] - For prepaid services, initial package sales and top-up vouchers are recognized as contract liabilities, while postpaid services generate contract assets for unbilled services[127] - Revenue from enterprise customers is recognized over time based on actual usage or elapsed time, with bespoke contracts being common[134] Financial Assets and Liabilities - The Group's financial assets are classified into categories such as amortized cost, FVTOCI, and FVTPL[169] - Expected credit losses (ECL) are recognized based on the difference between contractual cash flows and expected cash flows[185] - Financial liabilities are initially recognized at fair value, net of transaction costs for loans and borrowings[190]

Core Viewpoint - The article emphasizes the importance of value investing and highlights PT Telekomunikasi Indonesia (TLK) as a strong candidate for value investors due to its attractive valuation metrics and earnings outlook [2][6]. Company Summary - PT Telekomunikasi Indonesia (TLK) has a Zacks Rank of 2 (Buy) and an "A" grade in the Value category, indicating it is one of the strongest value stocks currently available [4][6]. - TLK is trading with a P/E ratio of 10.54, significantly lower than the industry average P/E of 20.75, suggesting it may be undervalued [4]. - Over the past year, TLK's Forward P/E has fluctuated between a high of 11.95 and a low of 7.98, with a median of 9.97 [4]. - The stock has a P/B ratio of 1.54, which is attractive compared to the industry's average P/B of 2.39, indicating a favorable valuation [5]. - TLK's P/B has ranged from a high of 2.34 to a low of 1.28 over the past year, with a median of 1.74 [5]. - The combination of these metrics suggests that TLK is likely undervalued and stands out as a strong value investment opportunity [6].

Core Insights - Michael Dion is an FP&A leader with diverse finance experience across various industries including Telecom, Media and Entertainment, Hospitality, and Construction [1] - He founded Mike's F9 Finance, a platform aimed at helping finance professionals enhance their careers [1] - Dion's investment strategy focuses on identifying value opportunities where market reactions to news are disproportionate, emphasizing strong fundamentals and a preference for dividend-paying stocks [1] - The importance of cash flow is highlighted as critical for both companies and investors at all levels [1]

Group 1 - Telkom Indonesia has filed its annual report on Form 20-F for the year 2024 with the U.S. Securities and Exchange Commission as required by the New York Stock Exchange Listed Company Manual [1] - The 20-F report is accessible on Telkom Indonesia's official website and the SEC website [1] - Holders of Telkom Indonesia's securities can request a hard copy of the 20-F report, including audited financial statements, free of charge [2]

Company Overview - PT Telkom Indonesia is the largest information and communications technology enterprise in Indonesia, focusing on digital connectivity, digital platforms, and digital services[9]. - The company serves five customer segments: mobile, consumer, enterprise, wholesale and international business, and other segments[9]. - The company's shares are traded on both the Indonesia Stock Exchange (IDX) and the New York Stock Exchange (NYSE) under the tickers TLKM and TLK, respectively[9]. Financial Reporting - PT Telkom Indonesia (Persero) Tbk filed its 2024 Annual Report on Form 20-F with the US SEC on April 28, 2025[7]. - The 2024 Audited Financial Statement is available for viewing on the company's website[7]. - Investors can request a hard copy of the 20-F Report via email or phone[8]. - The report is part of PT Telkom Indonesia's compliance with the NYSE Listed Company Manual[7]. Business Strategy - PT Telkom Indonesia aims to enhance its market position through continuous innovation in digital services[9]. - The company emphasizes its legacy services, including voice and SMS services, alongside its digital offerings[9]. Investor Relations - The company is committed to transparency and investor relations, as indicated by the filing of its annual report[6].

Financial Performance - The company reported a revenue increase of 15% year-over-year, reaching $5.2 billion in the last quarter[5] - The company reported a revenue increase of 15% year-over-year, reaching $1.5 billion in Q3 2023[1] - The company projects a revenue growth of 10% for Q4 2023, expecting to reach $1.65 billion[3] - The company has set a performance guidance of 12% revenue growth for the next fiscal year[5] - The company reported a net profit margin of 18%, reflecting improved operational efficiency[5] User Engagement and Growth - Average Revenue per User (ARPU) improved by 8% to $12.50, indicating stronger customer engagement[22] - User data indicates a 25% increase in active subscribers, reaching a total of 15 million[5] - User base expanded by 20%, totaling 10 million active users as of the end of Q3 2023[2] - Implementation of a new customer engagement strategy is projected to improve customer retention rates by 15%[8] Market Expansion and Strategy - The company plans to expand its market presence in Southeast Asia, targeting a 20% increase in user base by the end of the fiscal year[5] - Market expansion efforts in Southeast Asia are expected to drive a 30% increase in user acquisition[6] - A strategic acquisition of a local competitor is anticipated to close by Q3 2024, expected to increase market share by 10%[5] - The company completed a strategic acquisition of a local competitor for $300 million to enhance market presence[7] Product Development and Innovation - New product launches are expected to contribute an additional $300 million in revenue over the next two quarters[5] - New product launch in Q4 2023 is anticipated to contribute an additional $200 million in revenue[4] - Investment in R&D increased by 25%, totaling $150 million, focusing on next-generation technologies[5] - The company is investing $1 billion in 5G technology development to enhance service offerings and network capacity[5] Operational Efficiency and Cost Management - The company aims to reduce operational costs by 10% through efficiency improvements in the supply chain[9] - The company is focusing on enhancing its cybersecurity measures, allocating $50 million for upgrades in the next year[5] Future Outlook - Future outlook remains positive with a focus on sustainable growth and innovation in service offerings[10] - The company’s forward-looking statements include expectations regarding future operating performance and business prospects, which are subject to risks and uncertainties[186] - The company does not undertake any obligation to update or revise forward-looking statements after the date they are made[188] Financial Reporting - The company reported consolidated financial statements for the years ended December 31, 2023, and 2024, prepared in accordance with IFRS[181] - The exchange rate for converting Indonesian Rupiah to U.S. Dollars was Rp16,095.0 to US$1.00 for December 31, 2024, and Rp15,398.5 to US$1.00 for December 31, 2023[182] - Certain numerical figures in the financial data have been subject to rounding adjustments, which may cause slight variations in totals[183]

Group 1 - The article focuses on the Asia Value & Moat Stocks research service, which targets value investors looking for Asia-listed stocks with significant discrepancies between price and intrinsic value [1] - The service emphasizes deep value balance sheet bargains, such as net cash stocks and low price-to-book (P/B) stocks, as well as wide moat stocks that represent high-quality businesses [1] - The author provides a range of watch lists with monthly updates, specifically concentrating on investment opportunities in the Hong Kong market [1]

Front Matter [Statement of the Board of Directors](index=5&type=section&id=Statement%20of%20the%20Board%20of%20Directors) The **Board of Directors** affirms responsibility for the fair presentation of **2024** consolidated financial statements in accordance with **Indonesian Financial Accounting Standards** - The **Board of Directors is responsible** for the preparation, presentation, and internal control system related to the consolidated financial statements[10](index=10&type=chunk) - The financial statements for the year ended December **31**, **2024**, have been prepared and presented in accordance with **Indonesian Financial Accounting Standards**[10](index=10&type=chunk) [Independent Auditor's Report](index=6&type=section&id=Independent%20Auditor%27s%20Report) The independent auditor issued an **unqualified opinion** on the **2024** consolidated financial statements, with **telecommunication infrastructure useful lives** as a **key audit matter** - The auditor issued an **unqualified opinion**, stating the financial statements are fairly presented in accordance with **Indonesian Financial Accounting Standards**[14](index=14&type=chunk) - The **key audit matter** identified was the '**Evaluation of telecommunication infrastructure estimated useful lives**,' which represents **54%** of total consolidated assets at **Rp161,035 billion**[19](index=19&type=chunk) - The audit response to the **key audit matter** involved **evaluating internal controls**, **assessing management's assumptions** regarding asset replacements and technological developments, and performing **benchmarking analysis** against industry peers[21](index=21&type=chunk)[22](index=22&type=chunk) Consolidated Financial Statements [Consolidated Statements of Financial Position](index=11&type=section&id=Consolidated%20Statements%20of%20Financial%20Position) Total assets increased to **Rp299,675 billion** in **2024**, with corresponding increases in total liabilities and total equity Consolidated Statement of Financial Position Highlights (in billions of Rupiah) | Account | 2024 | 2023 | | :--- | :--- | :--- | | **Total Current Assets** | 63,080 | 55,613 | | **Total Non-current Assets** | 236,595 | 231,429 | | **TOTAL ASSETS** | **299,675** | **287,042** | | **Total Current Liabilities** | 76,767 | 71,568 | | **Total Non-current Liabilities** | 60,418 | 58,912 | | **TOTAL LIABILITIES** | **137,185** | **130,480** | | **TOTAL EQUITY** | **162,490** | **156,562** | | **TOTAL LIABILITIES AND EQUITY** | **299,675** | **287,042** | [Consolidated Statements of Profit or Loss and Other Comprehensive Income](index=12&type=section&id=Consolidated%20Statements%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Revenues slightly increased to **Rp149,967 billion** in **2024**, but rising costs led to a decline in operating profit and profit for the year Consolidated Income Statement Highlights (in billions of Rupiah) | Account | 2024 | 2023 | | :--- | :--- | :--- | | **REVENUES** | **149,967** | **149,216** | | **OPERATING PROFIT** | **42,991** | **44,384** | | **PROFIT BEFORE INCOME TAX** | 39,153 | 40,794 | | **PROFIT FOR THE YEAR** | **30,743** | **32,208** | | Profit attributable to owners | 23,649 | 24,560 | | **TOTAL COMPREHENSIVE INCOME** | **31,638** | **30,754** | | **BASIC EARNINGS PER SHARE (Rp)** | **238.73** | **247.92** | [Consolidated Statements of Changes in Equity](index=13&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Total equity increased to **Rp162,490 billion** in **2024**, primarily due to profit for the year, partially offset by **cash dividend** payments - Total equity grew from **Rp156,562 billion** at the end of **2023** to **Rp162,490 billion** at the end of **2024**[40](index=40&type=chunk) - The increase in equity was mainly due to the profit for the year (**Rp30,743 billion**), offset by **cash dividend** payments (**Rp24,782 billion**)[40](index=40&type=chunk) [Consolidated Statements of Cash Flows](index=14&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was **Rp61,600 billion** in **2024**, leading to a **Rp4,639 billion** net increase in cash and cash equivalents after investing and financing outflows Consolidated Cash Flow Summary (in billions of Rupiah) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **61,600** | **60,581** | | **Net cash used in investing activities** | **(29,456)** | **(36,909)** | | **Net cash used in financing activities** | **(27,505)** | **(26,567)** | | Net increase (decrease) in cash | 4,639 | (2,895) | | **Cash and cash equivalents at end of year** | **33,905** | **29,007** | Notes to the Consolidated Financial Statements [Note 1. General](index=15&type=section&id=1.%20GENERAL) Note **1** details the company's business, management, and key corporate actions, such as the **IndiHome spin-off to Telkomsel** and **Mitratel's telecommunication towers** acquisitions - The company's main business activities include providing **telecommunication networks**, information services, and **investing in other companies** to support its objectives[48](index=48&type=chunk) - A key corporate action was the **spin-off of the IndiHome business to Telkomsel** on **July 1, 2023**, which increased the company's **effective ownership in Telkomsel** from **65%** to **69.9%**[80](index=80&type=chunk) - Subsidiary **Mitratel** conducted **share buybacks**, repurchasing shares worth **Rp704 billion** as of Dec **31**, **2024**, and acquired **1,800 telecommunication towers** in **2023**[81](index=81&type=chunk)[84](index=84&type=chunk) [Note 2. Summary of Material Accounting Policies](index=25&type=section&id=2.%20SUMMARY%20OF%20MATERIAL%20ACCOUNTING%20POLICIES) Note **2** details material accounting policies, including revenue recognition and significant estimates, all conforming to **Indonesian Financial Accounting Standards (PSAK)** - The financial statements are prepared on an **accrual basis** in accordance with **Indonesian Financial Accounting Standards (PSAK)**[94](index=94&type=chunk)[95](index=95&type=chunk) - Revenue recognition follows a **five-step model under PSAK 115**, with specific policies for **four main streams: Mobile, Consumer, Enterprise, and Wholesale & International Business (WIB)**[165](index=165&type=chunk)[166](index=166&type=chunk)[170](index=170&type=chunk)[173](index=173&type=chunk)[178](index=178&type=chunk) - Significant accounting estimates include **retirement benefit obligations**, **useful lives of property and equipment**, **allowance for expected credit losses**, and **fair value measurement of financial instruments**[253](index=253&type=chunk)[257](index=257&type=chunk)[259](index=259&type=chunk)[267](index=267&type=chunk) [Financial Position Details (Notes 3-22)](index=53&type=section&id=Financial%20Position%20Details%20(Notes%203-22)) Notes **3-22** detail key financial position accounts, including assets, liabilities, and equity components like **non-controlling interests** Key Asset and Liability Balances (in billions of Rupiah) | Account | 2024 | 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | 33,905 | 29,007 | | Trade receivables - net | 12,193 | 10,667 | | Property and equipment - net | 180,566 | 180,755 | | Intangible assets - net | 9,442 | 8,731 | | Trade payables | 15,336 | 18,608 | | Short-term bank loans | 11,525 | 9,650 | | Long-term loans (incl. current) | 41,384 | 38,049 | - Material **non-controlling interests** are held in subsidiaries **Telkomsel** (**30.10%**) and **Mitratel** (**28.16%**), with a total NCI balance of **Rp20,396 billion**[341](index=341&type=chunk)[342](index=342&type=chunk) [Operational and Performance Details (Notes 23-29)](index=76&type=section&id=Operational%20and%20Performance%20Details%20(Notes%2023-29)) Notes **23-29** detail income statement components, including revenue by segment, major expenses, taxation, **earnings per share**, and dividend distributions Revenue by Segment (in billions of Rupiah) | Segment | 2024 | 2023 | | :--- | :--- | :--- | | Mobile | 83,400 | 85,291 | | Consumer | 26,310 | 26,436 | | Enterprise | 20,584 | 19,497 | | WIB | 18,000 | 16,922 | | Others | 1,673 | 1,070 | | **Total Revenues** | **149,967** | **149,216** | - **Basic earnings per share decreased to Rp238.73 in 2024 from Rp247.92 in 2023**[382](index=382&type=chunk) - **A cash dividend of Rp17,683 billion (Rp178.50 per share) for the 2023 fiscal year was approved and paid in May 2024**[384](index=384&type=chunk) [Other Notes (Notes 30-41)](index=86&type=section&id=Other%20Notes%20(Notes%2030-41)) Notes **30-41** cover pension benefits, segment performance, **contingencies**, **financial risk management**, subsequent events, and **PSAK/IFRS** differences - The company reports on **four primary segments: Mobile, Consumer, Enterprise, and WIB**. The **Mobile segment remains the largest contributor to revenue and profit**[444](index=444&type=chunk)[447](index=447&type=chunk) - A **significant contingency** exists related to ongoing investigations by the **U.S. SEC and DOJ** concerning a project with **BAKTI Kominfo**, accounting practices, and **FCPA compliance**. The potential financial impact is currently **not estimable**[484](index=484&type=chunk)[485](index=485&type=chunk) - Subsequent to year-end, the **Indonesian Government transferred its 52.09% stake** to a state-owned holding company, **PT Biro Klasifikasi Indonesia (BKI)**, and the company announced a **share buyback plan of up to Rp3,000 billion**[535](index=535&type=chunk) - The **net debt-to-equity ratio increased slightly from 28.82% in 2023 to 30.24% in 2024**[530](index=530&type=chunk)