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STOCK RECOMMENDATION - JAKARTA. PT XL Axiata Tbk, a leading telecommunications operator, (EXCL) has reported a double-digit revenue growth of Rp 32.4 trillion, marking a 10.9% increase year on year (YoY) in 2023.
This performance is primarily driven by monetization efforts that include digitalization initiatives and customer experience personalization, as well as price adjustments.
The revenue increase is also supported by the data and digital services segment, which saw growth throughout 2023, along with the robust managed service and IT as the newest business segments.
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MNC Securities' Research Analyst Vera stated that EXCL also managed to record a net profit growth of 14.6% YoY in 2023, compared to a decrease of 13.85% YoY in the previous year.
Vera predicts that in 2024, EXCL's revenue could increase by 7.4% and EBITDA could also rise by 7.6%, in line with management's target to achieve single-digit net profit and an EBITDA margin of 50%.
“Our rationale stems from the more constructive competitive landscape in the recent MNO market, and EXCL's stable customer base, which positions it for further monetization opportunities in the future,” Vera said in her research, April 4, 2024.
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Furthermore, Vera stated that EXCL also targets a capital expenditure of Rp 8 trillion to be capitalized throughout 2024. This figure is larger than the realization of capital expenditure in 2023, which was Rp 7.2 trillion.
On the other hand, EXCL is predicted to be more profitable this year, in line with its plan to take over the fixed broadband business line of PT Link Net Tbk (LINK), including its 750,000 customers.
Maximilianus Nico Demus, Associate Director of Research and Investment at Pilarmas Investindo, said that this plan has the potential to boost EXCL's performance even further this year. Moreover, 750 thousand Fixed Broadband customers can enjoy various products and services from EXCL.
“Link is also preparing to build a new network for 2 million homes passed that can be utilized by EXCL in the future. Therefore, this is in line with XL's focus on accelerating the growth of FBB and FMC services in Indonesia,” Nico told Kontan.co.id, Monday (22/4).
Nico believes that this will have a positive impact on EXCL in the future, with the hope that integration can proceed smoothly and quickly.
Nico predicts that EXCL's performance this year will continue to grow positively, in line with the company's financial growth which has been increasing for the past 5 years, both in terms of revenue and net profit. However, this performance declined during the Covid-19 pandemic.
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“So far, if we look at it since 2018, total revenue has continued to increase, supported by a significant increase in operating profit from 2022 to 2023. Therefore, this year's performance is also believed to be able to soar,” said Nico.
Nico is optimistic that this year, EXCL's performance can grow positively because this telecommunications issuer always knows how to provide the best service to the community.
Starting from joining with youth-based Axis, preparing XL Prioritas for the upper middle class, to the ecosystem they built makes the user experience much more enjoyable.
