In-Depth Analysis of Astra International and Major Companies
In-Depth Analysis of Astra International and Major Companies
Broker Name: UOB Kay Hian
Date of Report: Tuesday, 12 November 2024
Astra International (ASII IJ)
Recommendation: BUY (Maintained)
Share Price: Rp5,025
Target Price: Rp6,000
Upside: +19.4%
Company Overview
Astra International Tbk is a diverse conglomerate operating in industries such as automotive distribution, assembly, mining, plantations, finance, and information technology. The company is a significant player in the Indonesian market, known for its robust distribution network and high resale value products.
Stock Data
GICS sector: Industrials
Bloomberg ticker: ASII IJ
Shares issued: 40,483.60 million
Market cap: Rp203,430 billion (US\$12,846 million)
3-month average daily turnover: US\$17.0 million
52-week high/low: Rp5,850/Rp4,290
Major Shareholders: Jardine Cycle & Carriage (50.1%)
Company Performance
Astra International (ASII) has demonstrated resilience amidst intense competition in the automotive industry, particularly against Chinese electric vehicle (EV) manufacturers. The company’s strengths include economies of scale, mass market penetration, and a comprehensive distribution network.
ASII’s focus on hybrid vehicles is expected to drive growth, particularly outside of Java. Additionally, the company’s financing segment performed well in 9M24, driven by used vehicle financing, despite a 10% year-on-year (yoy) decline in four-wheeled (4W) retail unit sales.
Investment in Healthcare
ASII’s strategic investment in the healthcare sector has been promising. The company recently acquired Heartology Cardiovascular Hospital for Rp643 billion, bringing its total investment in healthcare to Rp4.2 trillion. The acquisition, made at a price of 1.6x price-to-book value (PBV), is significantly lower than the industry average of 4.0-4.5x PBV. ASII plans to leverage its investment in HaloDoc and order prescriptions from the pharmacy unit of Heartology.
Financial Highlights
ASII reported a 3Q24 core net profit after tax (NPAT) of Rp9,332 billion, a 5.2% yoy increase and a 1.4% quarter-on-quarter (qoq) rise. However, the automotive division’s NPAT fell by 14.7% yoy due to declining automobile unit sales. Despite this, the 9M24 core NPAT reached Rp26,005 billion, slightly above the company’s full-year forecast.
Key Financials
| Year |
2022 |
2023 |
2024F |
2025F |
2026F |
| Net turnover (Rpb) |
301,379 |
316,565 |
332,543 |
365,603 |
407,624 |
| EBITDA (Rpb) |
41,911 |
43,117 |
59,547 |
51,670 |
52,543 |
| Operating profit (Rpb) |
42,201 |
44,268 |
43,567 |
45,654 |
45,924 |
| Net profit (rep./act.) (Rpb) |
28,944 |
33,839 |
34,470 |
37,810 |
39,026 |
| Net profit (adj.) (Rpb) |
29,482 |
34,268 |
34,623 |
37,971 |
39,195 |
| EPS (Rp) |
728.3 |
846.5 |
855.2 |
937.9 |
968.2 |
| PE (x) |
6.9 |
5.9 |
5.9 |
5.4 |
5.2 |
| P/B (x) |
1.1 |
1.0 |
0.9 |
0.8 |
0.7 |
| EV/EBITDA (x) |
6.5 |
6.9 |
5.1 |
5.7 |
5.6 |
| Dividend yield (%) |
5.7 |
19.0 |
6.7 |
6.8 |
7.4 |
| Net margin (%) |
9.6 |
10.7 |
10.4 |
10.3 |
9.6 |
| Net debt/(cash) to equity (%) |
4.9 |
26.3 |
17.1 |
15.3 |
13.9 |
| ROE (%) |
15.1 |
17.0 |
15.0 |
14.9 |
14.1 |
Stock Impact
Automobile: The 9M24 automobile NPAT declined by 7.3% yoy. The wholesale car market in 9M24 was 16% lower at 633,000 units, and ASII’s car sales fell 15% yoy. Wholesale motorcycle sales rose 3% to 4.9 million units, while Honda motorcycle sales grew by 1%. Astra Otopart recorded a 16% rise in NPAT. 3Q24 NPAT dropped by 14.7% yoy.
Financial Service: The 9M24 NPAT rose 6.4% yoy to Rp6,230 billion. The consumer finance business saw a 9% increase in the new amount financed at Rp96.8 trillion. Car-focused financing expanded by 3% to Rp1.7 trillion. The motorcycle financing business jumped 9% to Rp3.3 trillion. Heavy equipment-focused finance companies saw an 18% increase in the new amount financed at Rp9.8 trillion, and NPAT rose 28% to Rp171 billion.
United Tractor: The 9M24 NPAT grew 1.5% on the back of higher gold prices and a recovery in the coal mining business. The 3Q24 NPAT rose 46.3% yoy.
AALI: The 9M24 NPAT was flat yoy at Rp638 billion. CPO and derivative sales decreased by 6% to 1.2 million, and CPO prices were 12% higher. The 3Q24 NPAT declined 30.7% yoy.
Infrastructure: The 9M24 NPAT reported a 27% increase, and the 3Q24 NPAT grew 33.3% yoy, driven by 5% higher traffic.
Information Technology: The 9M24 NPAT rose 21% yoy, and the 3Q24 NPAT grew 17.8% yoy.
Property: The 9M24 NPAT jumped 42% to Rp162 billion, and the 3Q24 NPAT expanded 47.8% yoy.
Earnings Revision/Risk
We have adjusted our 2024/25 core NPAT forecasts by 17.4%/21.7%, respectively. Our forecasts are 13.1% and 20.4% higher than consensus forecasts.
Change in Assumptions
| 2024F |
2025F |
2024F |
2025F |
Diff (%) |
| Domestic Automobile Sales |
890,046 |
1,001,302 |
890,046 |
1,001,302 |
0.0% |
| Domestic 2W Sales |
6.18 |
6.37 |
6.18 |
6.37 |
0.0% |
| Financial Service Revenue Growth |
4.2% |
12.1% |
4.2% |
12.1% |
– |
| UNTR Revenue Growth |
4.2% |
7.1% |
1.9% |
6.2% |
233 |
| AALI Revenue Growth |
21.5% |
2.5% |
24.5% |
1.8% |
(309) |
| Infrastructure Revenue Growth |
3.0% |
3.0% |
3.0% |
3.0% |
– |
| Property Revenue Growth |
(5.4%) |
7.0% |
(5.4%) |
7.0% |
– |
| IT |
5.0% |
5.0% |
5.0% |
5.0% |
– |
Valuation/Recommendation
We maintain our BUY recommendation with a higher target price of Rp6,000, equivalent to 6.4x 2025F PE. ASII is currently trading at 5.4x 2025F PE, below -2SD 2025F PE. With a 19.4% upside, we reiterate our BUY rating.
Profit & Loss Balance Sheet
| Year |
2023 |
2024F |
2025F |
2026F |
| Net turnover (Rpb) |
316,565 |
332,543 |
365,603 |
407,624 |
| EBITDA (Rpb) |
43,117 |
59,547 |
51,670 |
52,543 |
| Deprec. & amort. (Rpb) |
(1,151) |
15,980 |
6,016 |
6,618 |
| EBIT (Rpb) |
44,268 |
43,567 |
45,654 |
45,924 |
| Total other non-operating income (Rpb) |
10,520 |
12,014 |
14,260 |
15,691 |
| Net interest income/(expense) (Rpb) |
(59) |
(597) |
397 |
635 |
| Pre-tax profit (Rpb) |
54,729 |
54,983 |
60,311 |
62,251 |
| Tax (Rpb) |
(10,228) |
(10,447) |
(11,459) |
(11,828) |
| Minorities (Rpb) |
(10,662) |
(10,067) |
(11,042) |
(11,397) |
| Net profit (Rpb) |
33,839 |
34,470 |
37,810 |
39,026 |
| Net profit (adj.) (Rpb) |
34,268 |
34,623 |
37,971 |
39,195 |
Cash Flow
| Year |
2023 |
2024F |
2025F |
2026F |
| Operating (Rpb) |
33,746 |
46,383 |
35,787 |
38,963 |
| Pre-tax profit (Rpb) |
54,729 |
54,983 |
60,311 |
62,251 |
| Tax (Rpb) |
(10,228) |
(10,447) |
(11,459) |
(11,828) |
| Deprec. & amort. (Rpb) |
(1,151) |
15,980 |
6,016 |
6,618 |
| Working capital changes (Rpb) |
(13,954) |
(1,075) |
(7,538) |
(7,159) |
| Non-cash items (Rpb) |
– |
1,290 |
(380) |
(409) |
| Other operating cashflows (Rpb) |
4,339 |
(14,361) |
(11,177) |
(10,524) |
| Investing (Rpb) |
(35,989) |
(17,934) |
(18,816) |
(21,231) |
| Capex (growth) (Rpb) |
(21,163) |
(25,456) |
(19,152) |
(21,353) |
| Investments (Rpb) |
(17,879) |
4,199 |
(3,086) |
(3,402) |
| Proceeds from sale of assets (Rpb) |
– |
– |
– |
– |
| Others (Rpb) |
3,053 |
3,322 |
3,422 |
3,525 |
| Financing (Rpb) |
(17,379) |
(8,482) |
(22,011) |
(17,975) |
| Dividend payments (Rpb) |
(38,707) |
(13,536) |
(13,788) |
(15,124) |
| Issue of
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