EXCL - Spends IDR1.4tn in capex realization in 1Q23

XL Axiata (EXCL) has reported realization of capex spending at IDR1.4 tn as of 1Q23 of IDR8 tn planned this year, mostly earmarked for BTS expansions in ex-Java area. The realized capex in 1Q23 was 14% higher than previous year. (Source : Investor Daily) Comment : Ex-Java areas have become source of growth for mobile segment due to lower penetration compared to more matured market in Java areas, which is deemed to be a od move. On the other hand, it may need to carefully consider its expansion strategy to maintain its network quality in Java in order to retain market share, since ex-Java expansion may take significant capex. Despite that, we still maintain our positive view on EXCL especially on the back of improvement in pricing and undemanding valuation compared to peers.