ISAT - Heading to right direction

KBVS Update
Tuesday, 13 February 2024

ISAT : Heading to Right Direction 
(BUY with upgraded TP: IDR11,950)

•    ISAT's FY23 results beat ours/consensus by 1.5%-29.3%, thanks to strong 4Q23 despite lower EBITDA margin at 47.0% (VS 47.6% in 3Q23) on the back of higher core costs on costs of service and marketing expenses

•    4Q23 EBITDA came in at IDR6.41tn (+6.4% qoq), bringing FY23 EBITDA at IDR23.94tn or increasing 23.0% yoy, achieving 102.1%/101.9% of ours/consensus.

•    FY23 revenue grew 9.6% yoy to IDR51.23tn, thanks to solid value-added service and data. This represented 2.0%/1.5% of ours/consensus.

•    The company's solid top-line growth was largely helped by improvements in its operational metrics, especially ARPU that reached IDR38.5K per sub, data yield was also stabilized in 4Q23 to IDR3.0/MB

•    Management guides ‘24 EBITDA margin to close to 50% in 2024 with revenue growth expected to be better than market, driven by improving ARPU, while ISAT aims to secure 8-10% of HBB market share by 2026

•    We have revised up our 24E/25E topline figures by 0.4%/0.9% higher than our previous forecasts.

•    We maintain our BUY call with higher target price of IDR11,950 (previously: IDR11,860) as we revise up our ‘24E/’25E earnings projections by +0.4-2.6%.

Regards,
Devi Harjoto – KBVS Research Team