Dividend re-rating on the horizon: Quick Note

Research evidence excerpt

Dividend re-rating on the horizon: Quick Note

Nomura Securities Malaysia Sdn Bhd

Sarana Menara Nusantara TOWR.JK TOWR IJ 22 July 2026

EQUITY: TELECOMS

RatingDividend re-rating on the horizon Remains Buy

Target price IDR 950 RemainsQuick Note

Closing priceTOWR's cash flow and balance sheet are quietly laying the groundwork for what we 21 July 2026 IDR 412

believe is one of the most underappreciated catalysts in our Indonesian tower coverage: a

meaningful step-up in dividend capacity from 2027F onwards. Trailing 12-month moving

average Adjusted Funds From Operations (AFFO) reached IDR1.78tn in 1Q26, up steadily Research Analysts

from IDR1.68tn in 1Q25, IDR1.58tn in 1Q24 and IDR1.45tn in 1Q22 (refer to Fig.1) – a Indonesia Research Teamsteady expansion despite multiple rate hikes, tower consolidation and elevated capex.

Heng Siong Kong - NSMOver the same period, net debt-to-AFFO declined materially from its 4Q24 peak of 7.98x hengsiong.kong@nomura.com

to 6.58x in 1Q26 (refer to Fig.2), moving back below late-2023/early-2024 levels. In our +603 2027 6894

view, improving cash generation alongside declining leverage is the classic precursor to

higher shareholder distributions, yet we believe the market has yet to reflect this in Onshore expert

dividend expectations.

Erwin Wijaya (erwin.wijaya@verdhana.id)

The two charts below capture the same story from different perspectives. AFFO has

Theonshoreexperts,whoarecompounded at a mid-single-digit rate since 1Q22, with growth re-accelerating from 2H25

employedbyPTVerdhanaSekuritasas tenancy trends improve and cost discipline remains intact. At the same time, net debt-

Indonesia(“Verdhana”)andarenotto-AFFO – the key leverage metric for tower operators – has fallen from nearly 8.0x to licensedoutsideIndonesia,have