EXCL - Weak 4Q20 Results
- EXCL’s quarterly revenue growth in 4Q20 showed worse
performance than last quarter. The company’s revenue declined 3.4% QoQ to IDR
6.35 Tn in 4Q20, which brings the Full-year 2020 revenue at IDR26 Tn (+3.5%
YoY).
Soft revenue and a slight increase in cash opex this
quarter leads EXCL to record IDR 3.17 Tn (-7.0% QoQ) EBITDA with an EBITDA
margin of 49.8%.
Huge D&A expense this quarter causes the company to
book net losses at IDR 1.7 Tn this quarter and net profit for the full year
result of IDR
372 Bn (-47.9% YoY)
- EXCL subscribers base successfully grow 1.78% QoQ
in 4Q20 to 57.89mn subscribers with smartphone penetration at 89%, the highest
in the industry. Data yield declined to 3.85 IDR/MB this quarter. A decline in
data yield further depress ARPU to IDR34,000 this quarter, its consecutive
decline since 3Q20
- EXCL management states that the company will focus on
expanding its mobile services in the ex-java market and continue to expand its
fixed broadband market. EXCL's management gives a positive view on M&A
action in the industry because it brings the industry healthier than before.
However, based on EXCL's previous experience when
acquiring Axis, combining business operations between two operators could take
1-2 years. Company's management also said that EBITDA margin in 2021 will be at
a minimum of 50% and dividend payout ratio at around 30% of normalized net
profit (IDR679 Bn) in FY20
- We adjust our assumption due to soft revenue growth in
the future and a one-off accelerated depreciation in 2020. We expect EXCL
revenue in
2021 to grow 4.13% YoY to IDR27 Tn and EBITDA at
IDR13.9Tn with a stable EBITDA margin above 50%.
- We reiterate our Buy rating with a lower target price
of IDR 3,300 vs IDR 3,600 previously that would place EXCL at 4.71x FY21F
EV/EBITDA.
EXCL is currently traded at 3.9x EV/EBITDA, below the
company’s EV/EBITDA 5 years average and even near its -2STD that makes the
price attractive.
PT. Phillip Sekuritas Indonesia
Research Department
Atria @Sudirman Level 23B
Jl. Jend. Sudirman Kav. 33A, 10220 Jakarta
Ph: (62 21) 57900 800
Email: research@phillip.co.id
Website: www.poems.co.id
