Credit Suisse: XL AXIATA (EXCL): Above and strong 1Q10 +9% QoQ EBITDA – maintain Hold

Given higher capex guidance the upside of Colin’s DCF Rp3,850 seems muted, despite 1Q EBITDA already achieved 30% of 2010F. Pending possible eps upgrades, at Rp3,450- EXCL is trading on 21x-15.1x 2010F-2011F PER (consensus is on 17.2x-13.6x 2010-11 PER). Assuming upcoming DCF Rp4,000 it is implying 15% upside to current price Rp3,450, while TLKM clearly offers more attractive 23% upside to its DCF Rp9,400 as well ISAT offers 22% upside to its DCF Rp7,100.

· Colin McCallum (Daily): Excelcom delivered a 3.7% QoQ growth in net cellular service revenue into 1Q10, driven by an increase in voice tariff and data usage. Aggressive cost control programmes clearly amplified its high operational gearing, resulting in an impressive 9.0% QoQ growth in EBITDA. Excelcom achieved 26.2% of our FY10E net cellular service revenue and 30.1% of our FY10E EBITDA in 1Q10. The company also raised its guidance. There is clearly an upside risk to our revenue and EBITDA forecasts, but the impact on cash flows could partly be offset by an increase in capex.

· Despite Excelcom’s ongoing management excellence, we prefer to play Indosat, which has more ability to cut costs and capex, and PT Telkom, which has underperformed its peers very sharply YTD, but should still benefit from a higher-than-expected overall Indonesian market revenue growth. We maintain our NEUTRAL