Company Update  /  Automotive / 

ASII

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 Author(s):  Giovanni Dustin    ;Ryan Dimitry 

• 1Q24 core profit was Rp8.1tr (-6% yoy/+3% qoq), in-line with our/consensus estimates as soft agri was offset by solid fincos.
• 1Q24 auto's net profit declined by -9% yoy/+22% qoq, also came in-line.
• We upgrade our rating on
  ASII
  from Hold to Buy, mainly on valuation, with a slightly higher SOTP -based TP of Rp5,900.

FY23 core profit met our forecasts

ASII

booked 1Q24 net profit Rp7.5tr (-14% yoy/-8% qoq), forming 25/24% of our/consensus FY24F - in-line. Stripping off the fair value adjustments from investments in

GOTO

and Hermina, 1Q24 core profit was Rp8.1tr (-6% yoy/+3% qoq), also in-line with our expectations (at 25%), as soft agri's performance was offset by better-than-expected fincos. Meanwhile, auto and

UNTR

's results met our estimates.
Auto net profit remained soft in 1Q24, though still within our expectations
Auto's net profit declined to Rp2.8tr (-9% yoy/+22% qoq) in 1Q24, partly due to lower sales volumes. It is worth noting that

ASII

's 4W wholesale sales volume decreased to 130k units (-12% yoy/-8% qoq) in the quarter. Its market share was flat qoq at 56% (vs. 54%/56% in 1Q23/4Q23). Concurrently, its 2W sales volumes came in at 1.3mn units (-8% yoy/+16% qoq), translating to 2W market share of 76% (vs. 79%/75% in 1Q23/4Q23). Auto's net margin improved sequentially to 8% (-81bps yoy/+31bps qoq).
Weaker-than-expected

AALI

was offset by solid fincos' performance
Fincos booked 1Q24 net profit of Rp2.1tr (+12% yoy/+5% qoq) supported by consumer financing on larger loan portfolios.

UNTR

's 1Q24 net profit declined to Rp2.8tr (-15% yoy/-14% qoq), as pre-tax margin fell, most notably from the coal mining segment. Meanwhile, agri 1Q24 net profit declined by -9% qoq to Rp184bn (though still +3% yoy) and only reached 19% of our FY24F despite +4% yoy CPO sales, largely due to lower-than-expected CPO ASP (-1% yoy).
Upgrade from Hold to Buy on valuation; new TP of Rp5,900
Overall,

ASII

's 1Q24 results was in-line. We revised up

ASII

's FY24-25F earnings by 3-5%, mainly to factor-in FY23 and 1Q24 data points, as well as slightly higher/lower net profit for fincos/agri. We upgrade our rating on

ASII

from Hold to Buy, mainly on valuation, with a slightly higher SOTP -based TP of Rp5,900 (vs. Rp5,800 previously). The proposed final dividend of Rp322/sh (after Rp98/sh interim), which implies 6.4% yield, could help to support its share price in the near-term. Risks: 1) lower-than-expected 4W/2W volumes; and 2) /lower-than-expected commodity prices.


Sumber : IPS