ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

In Equity Sales and Research for more than 25 years covering Asian markets. Possesses in-depth knowledge of a wide range of companies, economies, and markets in Asia. Over his career, he has specialised in HK/China and ASEAN markets at various different Investment Banks, most recently heading equities in Indonesia for Bank of America Merrill Lynch in Jakarta for more than three years. Whilst in Jakarta, he produced a well-read daily and weekly product on the Indonesian market, which included company visits, as well as political, economic and sector commentary. A former racing skier, who enjoys ultra-marathons and surfing in his spare time.

ASEAN Insight Provider

The Week That Was in ASEAN@Smartkarma - Indonesian Property Boon, Philippine NPLs, and Drugs

XL Axiata (EXCL IJ) - Rising Through The Cloud

XL Axiata (EXCL IJ) - Rare and Ironic COVID-19 Beneficiary

XL Axiata (EXCL IJ) - Enabling and Converging in Indonesia

XL Axiata (EXCL IJ) - Defensive Data Growth with a Fibre Twist

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Indonesian mobile operator company <a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ)</a> released a respectable set of FY2020 results last week with a +6% YoY increase in service revenue, despite COVID-19.
The increase was driven by data revenue with a growth of +10% YoY to IDR21.39tn, making up 92% of service revenues, with 89% of its subscribers using smartphones, making it the purest play on data in the industry. 
<a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ)</a> also posted a +31% YoY increase in EBITDA to IDR13.06tn but profit for the year fell -91.8% to IDR 371.6bn. It did however see a +76% increase in FCF on the back of increased EBITDA. 
2020 data traffic grew by +47% YoY partly due to an increase in the number of subscribers from 56.88 Mn in the 3Q2020 to 57.89 Mn in the 4Q2020. There was also a YoY increase in average revenue per user (ARPU) to IDR 36,000 in 2020 versus IDR35,000 for FY2019.
The company continues to build out its 4G coverage and reposition its subscriber base and reallocate capacity towards 4G, with only 10% now left using the 3G service.
For 2021, <a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ)</a> is allocating a capex of IDR 7tn focusing on developing the network infrastructure, IT development, and digitization. In addition, the company is also focusing on the fiberization process to prepare the network for the eventual launch of 5G.
<a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ)</a> remains the purest proxy for the continued growth in demand for data in Indonesia and should also be a beneficiary from the ongoing consolidation in the industry, with Hutchison's "3" slated to merge with <a href="https://www.smartkarma.com/entities/indosat-tbk-pt" target="_blank" data-smartkarma-citation="entities:5737:1" rel="noopener">Indosat Tbk PT (ISAT IJ)</a>. 
This should help to alleviate competitive pressures on data pricing. <a href="https://www.smartkarma.com/entities/xl-axiata-tbk-pt" target="_blank" data-smartkarma-citation="entities:15028:1" rel="noopener">XL Axiata (EXCL IJ) </a>trades on 3.7x FY21E EV/EBIDTA and 3.2x FY22E EV/EBITDA versus its 3-year average forward EV/EBITDA of 4.8x, making it look attractive from a valuation standpoint.

Indonesian mobile operator company XL Axiata (EXCL IJ) released a respectable set of FY2020 results last week with a +6% YoY increase in service revenue, despite COVID-19.
The increase was driven by data revenue with a growth of +10% YoY to IDR21.39tn, making up 92% of service revenues, with 89% of its subscribers using smartphones, making it the purest play on data in the industry. 
XL Axiata (EXCL IJ) also posted a +31% YoY increase in EBITDA to IDR13.06tn but profit for the year fell -91.8% to IDR 371.6bn. It did however see a +76% increase in FCF on the back of increased EBITDA. 
2020 data traffic grew by +47% YoY partly due to an increase in the number of subscribers from 56.88 Mn in the 3Q2020 to 57.89 Mn in the 4Q2020. There was also a YoY increase in average revenue per user (ARPU) to IDR 36,000 in 2020 versus IDR35,000 for FY2019.
The company continues to build out its 4G coverage and reposition its subscriber base and reallocate capacity towards 4G, with only 10% now left using the 3G service.
For 2021, XL Axiata (EXCL IJ) is allocating a capex of IDR 7tn focusing on developing the network infrastructure, IT development, and digitization. In addition, the company is also focusing on the fiberization process to prepare the network for the eventual launch of 5G.
XL Axiata (EXCL IJ) remains the purest proxy for the continued growth in demand for data in Indonesia and should also be a beneficiary from the ongoing consolidation in the industry, with Hutchison's "3" slated to merge with Indosat Tbk PT (ISAT IJ). 
This should help to alleviate competitive pressures on data pricing. XL Axiata (EXCL IJ) trades on 3.7x FY21E EV/EBIDTA and 3.2x FY22E EV/EBITDA versus its 3-year average forward EV/EBITDA of 4.8x, making it look attractive from a valuation standpoint.

XL Axiata (EXCL IJ) - High-Speed Digital Enabler