ISAT: In-line 9M earnings with rising data yield

ISAT bagged a revenue of IDR34.51 tn in 9M22, accounting for 81.4%/75.3% of ours/consensus estimates. The figure grew strongly 49.8% yoy in 9M22. On quarterly basis, revenue inched up 3.0% qoq to IDR12.0 tn in 3Q22, thanks to higher data revenue as data yields slightly improved +1.2% qoq. However, EBITDA margin slid qoq from 41.2% in 2Q22 to 40.9% in 3Q22 due to surging costs. Reported net profit yoy, however, plunged 36.4% yoy to IDR3.67 tn in 9M22, yet it is still representing 81.3%/117.9% of ours/consensus estimates, while qoq net profit tumbled 86.4% qoq to IDR427 bn. ISAT's number of subs increased 2.5% qoq to 96.2 mn, or jumped 55.9% yoy following the merger, which is widely expected. This was also followed by skyrocketing data traffic +92.4% yoy. Nevertheless, we see growth in data traffic was flattish qoq by +0.9% qoq. Meanwhile, data yields managed to increase 1.2% qoq in 3Q22. (Source: Company) Comment: While ISAT's declined net profit was barely a surprise, our view still holds that the oning asset integration will bring more value in coming years.