EXCL – Strong 2Q23 results, beating estimates

EXCL's 2Q23 revenue grew 8.9% qoq to IDR8.22 tn, bringing 1H23 revenue to IDR15.8 tn (+12% yoy), beating ours/consensus at 51% amid strong ARPU expansion in 2Q23. Meanwhile, 2Q23 normalized net profit more than doubles qoq at IDR453 bn and brought 1H23 figures jumped 12.3% yoy to IDR658 bn, topping ours/consensus at 55.4%/54.9%. EXCL's 2Q23 EBITDA grew 15.0% qoq to IDR4.01 tn, bringing 1H23 to IDR7.5 tn (+15.5%), or ahead our estimates at 51.0%. This is followed by expansion in EBITDA margin by 260 bps qoq to 48.8% in 2Q23. Meanwhile, EXCL's ARPU also reached its highest at IDR42K/ user, resulted from management's efforts to increase price in 1H22 especially during Eid holidays. During, the call management reiterates its initiatives to further continue price rationalization in 2H22, while eyeing to reach +400K of home connects. Furthermore, management still retains target for structural transformation be concluded by year-end. Comment : EXCL's continuous efforts to rationalize price has borne fruits to its strong performance, and indicates a healthier competition in the industry. We like the company's strategy to improve its customer’s quality by using AI-based apps that will further improve its data service quality and positively impact its cost. Reiterate BUY.