Having a healthy balance sheet, PT Sarana Menara Nusantara Tbk (TOWR) has the potential to continue expanding its towers.

TOWR expected revenue and profit growth to be positive. Until the third quarter of 2020, TOWR recorded revenue growth of 19.3% on an annual basis to Rp5.55 trillion.

Meanwhile, net profit also recorded an annual growth of 19.5% to Rp1.9 trillion. Thanks to additional rental towers of 5,269 and other leases of 12,244 kilometers of fiber optics, the net profit increased. The rental ratio for TOWR towers has increased from 1.67 times to 1.81 times.

Panin Sekuritas analyst, Rigel Andriansyah, projects that Sarana Menara's performance has the potential to grow again this year, supported by tower growth both organically and inorganically.

"TOWR is quite aggressively acquiring towers. In the fourth quarter of 2019, Sarana Menara Nusantara took over 1,000 tower units belonging to PT Indosat Tbk (ISAT), TOWR also acquired 1,600 towers of PT XL Axiata Tbk (EXCL) in the second quarter of 2020, "he said.

The acquisition of TOWR has the potential to continue this year. Moreover, Rigel considered, TOWR has a healthy balance position among other tower players.

"The loan ratio (leverage) which is measured by dividing net debt by annualized EBITDA of TOWR is around 3.5 times, while other players have at 4 and 5.2 times," Rigel said.

Looking at TOWR's balance sheet, Rigel is sure about TOWR's ability to acquire the tower again this year. The company also admits that it is ready to explore the opportunity to purchase the ISAT telecommunications tower, which plans to sell 4,000 towers this year.