KUALA LUMPUR: Axiata Group Bhd's Indonesian subsidiary, PT XL Axiata, beat expectations with a first-quarter (Q1) 2024 net profit of 547 billion rupiah, according to Hong Leong Investment Bank Bhd (HLIB).
HLIB said that this figure represents 34 per cent of the full-year estimate on the street.
"The positive surprise was thanks to stronger-than-expected earnings before interest, taxes, depreciation, and amortisation (ebitda) margins and a lower-than-expected tax rate," it said in a note.
Besides that, HLIB said XL Axiata added 100,000 to its total subscriber base quarter-on-quarter (QoQ) to 57.5 million, as both prepaid and postpaid saw positive developments.
Both prepaid and postpaid average revenue per user (ARPU) improved to 43,000 rupiah and 89,000 rupiah, respectively.
"With the improved coverage and more affordable device bundle offerings, data users generated total traffic of 2,609 PB in Q1 2024," it said.
HLIB is positive about Axiata's expansion, where it continues to invest to provide high quality internet services, especially Java, by expanding 4G coverage.
The bank likes its regional exposures with a focus on emerging countries, which may deliver great growth potential.
"While we believe that the CelcomDigi merger will reward Axiata over the long term, regulatory and economic risks are major concerns.
"Other potential corporate exercises that may unlock values include tower asset and digital business listings.
"We reiterate Hold on Axiata with an unchanged target price of RM2.71," it added.
