Invest Indonesia - Telco Industry - XL Axiata

XL Axiata :
Stock Code : EXCL.JK Price = Rp 5,200
No of Shares : 8,508,000,000

Background:-

PT XL Axiata Tbk. ('XL') was established on 8 October 1989, under the name
PT Grahametropolitan Lestari. Its main business was in trading and general services.

Six years later, XL took an important step by setting up a partnership with Rajawali
Group - a shareholder of PT Grahametropolitan Lestari - and three foreign investors
(NYNEX, AIF and Mitsui). Its name was changed to PT Excelcomindo Pratama, with the
provisioning of basic telephony services as its core business.

XL commenced commercial operations in 1996, primarily covering Jakarta, Bandung and
Surabaya areas. This made XL the first private company in Indonesia to provide
cellular mobile telephony services.

September 2005 was a major milestone for the Company. Upsizing on all fronts, XL
became a public company listed on the Jakarta Stock Exchange [now known as the
Indonesia Stock Exchange (IDX)]. Currently, the majority of XL's shares are held by
Axiata Group Berhad ('Axiata') through Indocel Holding Sdn. Bhd. (66.7%) and
Emirates Telecommunications Corporation (Etisalat) through Etisalat International
Indonesia Ltd. (13.3%).

XL is now leading the industry as a cellular telecommunications provider with
extensive coverage throughout Indonesia. It provides services for retail customers
and offers business solutions for corporate customers, including voice, data and
other value-added mobile telecommunications services. XL operates its network with
GSM 900/DCS 1800 and IMT-2000/3G technologies. XL also holds a Closed Regular
Network License, Internet Service Provider (ISP) License, Voice over Internet
Protocol (VoIP) License, and Internet Interconnection Services License (NAP).

Other Information:-OPERATING MEASURES

Number of Employees (permanent & contract with permanent position) =2 ,360
Postpaid subscribers (000) =290
Prepaid sim cards (active and grace / million) =40.1
Total subscriber base (millio)= 40.4 ( rank 3rd place after TLKM and Indosat)
ARPU blended (Rp 000) =34
Postpaid revenue/sub (Rp 000) =192
Prepaid revenue/sim card (Rp 000) = 32

Financial Highlight For Fy2010:- (as at 31-1-2011)

1. EPS : Rp 237 (FY09) > Rp 340 (FY10) + 43%
2. Total Asset = Rp 27,251 billion ( RM9.3 billion)
3. Total Liabilities = Rp 18,577 ( RM6.3 billion)
4. Equity = Rp 8,803 (RM 3 billion )
5. Dividend payout policy= 30% of normalised EPS

Comments:
a) Expect earning growth rate of minimum 20% for FY2011.
b) Increase in subscriber base and prepaid and postpaid revenue due to increase in income.
c) Expect record EPS for FY2011= Rp380 - Rp400
d) Target price = Rp6080 - Rp6400 based on 16x PER for Fy2011 ( upside 23% )
e) Therefore, any adjustment below Rp5000 will provide good opportunity to accumulate this counter.


Another Counter To Consider : TLKM.JK , Largest telco company in Indonesia. 52.47% owned by Indonesia government
1. Price = Rp7,600, Target Price 11,200 based on 16X PER of FY2011. (upside 47%)
2. Expected EPS FY2011 = Rp700