KUALA LUMPUR: Axiata Group Bhd's Indonesian operating company, PT XL Axiata Tbk's, first half (1H) 2021 core net profit of 564 billion rupiah beat expectation, accounting for 72 per cent of consensus' full-year estimate, Hong Leong Investment Bank (HLIB) Research said.
The bank-backed research firm said the positive surprise was due to lower-than-expected depreciation and amortisation (D&A), net finance expense and effective corporate tax rate.
Besides that, HLIB said XL Axiata added 750,000 to its total subscribers base or 1.3 per cent quarter-on-quarter (QoQ) to 56.8 million, as both prepaid and postpaid saw positive developments.
The prepaid average revenue per user (ARPU) increased by 3,000 rupiah QoQ to 36,000 rupiah, while postpaid's ARPU was stable at 108,000 rupiah.
HLIB is positive on Axiata's regional exposures, focusing on emerging countries that may deliver great growth potentials.
"While we are positive on Celcom-Digi merger allowing Axiata to unlock values, regulatory (especially in Nepal) and execution risks are major concerns.
"Other potential corporate exercises that may unlock values include tower asset and digital businesses listings," it said in a note today.
HLIB has maintained its forecast pending analyst briefing in conjunction with Axiata's second quarter (Q2) 2021 results announcement on August 27.
The research firm has maintained its 'Hold' call on Axiata with an unchanged target price of RM3.51.