EXCL - Strong 9M23 EBITDA growth

EXCL - Strong 9M23 EBITDA growth EXCL's 9M23 EBITDA was well-ahead ours at 76.1%, yet relatively in-line with consensus estimates at 74.7%, as 3Q23 EBITDA rose 14.5%/0.4% yoy/qoq to IDR4.03 tn. The higher EBITDA was mostly attributable to manageable core costs that were reflected by expanded margin +90bps qoq. Nevertheless, the company's 3Q23 net revenue decreased slightly 1.4% qoq to IDR8.10 tn, yet it brought 9M23 net revenue of IDR23.9 tn or +10.5% yoy, topping ours/consensus at 75.9%/75.7%. The declined revenue qoq was mostly driven by lower data revenue on the back of flattish data traffic and reduced data yields, in our view. However, 3Q23 ARPU stayed at c. IDR43/subs. Meanwhile, EXCL's convergence penetration reached 69% in 3Q23 compared to 56% in the previous quarter, demonstrating consistent growth of XL Satu Fiber presence. (Source: Company, KBVS Research) Comment: EXCL's 9M23 performance was generally in-line with ours/estimates. Management retains its guidance for high single digit revenue growth this year with EBITDA margin at c.49%. EXCL is currently undervalued, trading at -1SD 5-year historical mean at 2.3 forward EV/EBITDA. We are still revisiting our models.