EXCL - Strikes transformation deal with LINK

EXCL - Strikes transformation deal with LINK XL Axiata (EXCL) has received as many as 750,000 broadband subscribers from Link Net (LINK) as part of its structural transformation program. The transformation is aimed to strengthen EXCL business as ServeCo while LINK will be poised as FiberCo. As part of the deal, LINK will also roll out 2 million out of 6.5 mn new home passes for the next 2 years. (Source: Bisnis Indonesia) Comment: The deal marks a structural transformation which involves subs handover from LINK, to strengthen EXCL position on broadband and FMC market, while pursuing asset light strategy. We also expect EXCL may gain a competitive lease rate from LINK for fiber deployment. We maintain our BUY call on EXCL with a target price of IDR2,950, representing 3.0x '24 EV/EBITDA.