Research & Stock Picks

Company Reports

07 February 2025

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XL Axiata (EXCL): IDR 2,290 – SELL, SSI TP: IDR 2,000; Cons. TP: IDR 2,944

Strength

Solid double-digit EBITDA growth in 2024 (+11.0% YoY), driven by the declines in marketing (-22% YoY) and rental & service expenses (-21% YoY); positive growth in subscriber base bodes well for EXCL’s market presence despite smaller cellular share

Weakness

Lower 4Q24 ARPU at IDR 41K (4Q23: IDR 43K), mainly due to weaker purchasing power and intense competition, particularly from low-cost SIM cards; the substantial YoY growth in 4Q24 net profit was primarily driven by one-off large tax payment in 4Q23

Opportunity

EXCL-FREN merger could improve economies of scale, particularly in spectrum auctions, and help reduce price competition; additional subscribers of 750K from LINK may help boost revenue contribution from FFB in 2025 (previous: 250K)

Threat

Weaker purchasing power may lead to down-trading, triggering another price war; post-merger integration challenges may result in lower margins and negative bottom-line growth in the short term, resulting in share price performance reversal

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EXCL One Pager 4Q24

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EXCL One Pager 4Q24

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