Company's financial results and opportunities for further growth. In 2018, the Company showed revenue growth of 6% y/y mainly in the B2B segment (49% of total revenue) with an increase in total costs of ~2.7% y/y. The EBITDA margin reached 35.9% in 2018 (as opposed to 36.2% for 2017). The company identifies new business areas, such as e-commerce, M2M, cloud technologies and a platform for the development of digital services.
Acquisition of Kcell. The consolidation of the telecommunications segment and the acquisition of Kcell will allow the Company to expand its subscriber base, optimize the costs of integrating the infrastructure, the overall technological base and reduce the cost of providing mobile communication services. Given the high capital investment in maintaining the current infrastructure and the deployment of 5G networks, the Company, in our opinion, will be able to optimize investments in network expansion due to the synergy effect.
Improving the performance of the JV Tele2-Altel. We note that the main driver for improving the results of Kazakhtelecom are the financial results of JV Tele2-Altel. Following the results of 2018, JV Tele2-Altel significantly increased its subscriber base, scale of operations and integrated operational processes with Kazakhtelecom, which had a positive effect on the Company's total indicators.
Planned SPO of Kazakhtelecom. The proposed placement on the AIFC Stock Exchange is a key event that will enable the Company to attract investors, and to increase the transparency of its activities in accordance with international standards.
12M TP 30 130 KZT for ordinary share and 13 525 KZT for preferred share, recommendation to Buy. The acquisition of Kcell and the complete consolidation of JV Tele2-Altel will expand the Company's asset portfolio and the range of information and communication services. We note that with successful integration of operational processes, the Company will be able to generate enough cash flows to cover its debt obligations. Despite the volatility of the telecommunications market due to the significant investments required to maintain and build networks, we believe that by increasing its share in the telecommunications market, the Company will reduce operating/capital expenditures in the long term. According to our calculations, the Company's dividend yield for 2019 will be ~3.3% or 834KZT/share.
