Astra International (ASII): A Dominant Force in Indonesia’s Automotive Sector
Astra International, a conglomerate with interests in automotive, financial services, heavy equipment, plantations, and other sectors, continues to solidify its position as a key player in Indonesia’s economic landscape. The report by Maybank Sekuritas Indonesia highlights Astra’s remarkable ability to defend its market share amid fluctuating market dynamics and evolving consumer preferences.
Valuation and Recommendation
Maybank Sekuritas Indonesia maintains a BUY recommendation for Astra International, setting a target price (TP) of IDR 5,650. This valuation is based on a forward P/E ratio of 7.8x for FY25E, supported by an attractive valuation of 6x FY25F P/E and a robust dividend yield of approximately 7%. The report emphasizes Astra’s diversified growth profile and its ability to maintain resilience across business portfolios despite weak sales data in early 2025.
Market Dynamics and Sales Insights
Domestic vehicle sales in January 2025 totaled 61.8k units, reflecting an 11% year-on-year (YoY) and 23% month-on-month (MoM) decline. This slump is attributed to front-loaded purchases in December 2024, driven by the anticipation of a VAT hike and “opsen” tax increases in January 2025. Despite these challenges, Astra International managed to maintain its market share dominance at 55.8%, representing a 300 basis point (bps) MoM and 140 bps YoY increase.
The motorcycle segment showed a modest recovery, with January 2025 sales reaching 557k units, a 6% YoY decline but a substantial 38% MoM increase. This rebound was driven by demand normalization and adjustments to tighter credit conditions.
Key Competitors and Market Share
In January 2025, Toyota and Lexus, distributed by Astra, continued their dominance, while Hyundai gained traction with its Creta model, capturing a 3.7% market share. Mitsubishi’s and Suzuki’s shares experienced slight declines, while top Chinese brands such as Wuling, BYD, and Chery maintained a combined market share of 5.2%. The penetration of Battery Electric Vehicles (BEVs) in Indonesia remained steady at approximately 4%. BYD led the BEV segment with a 45% share, followed by Chery and Wuling at 23% and 14%, respectively.
Financial Performance
The financial metrics reveal Astra’s stability despite external headwinds. Revenue for FY24E is projected at IDR 310,613 billion, a slight decline of 1.9% compared to FY23A. However, EBITDA is expected to remain robust at IDR 53,957 billion, reflecting a margin of 17.4%. Core net profit for FY25E is forecasted at IDR 32,290 billion, a modest 1.7% YoY increase. Key profitability ratios, such as ROAE and ROAA, are projected at 13.8% and 6.6%, respectively, for FY25E.
Strengths and Opportunities
- Astra’s extensive dealership network for Toyota and Daihatsu vehicles reinforces its market leadership.
- The heavy equipment division maintains a strong foothold in mining and construction sectors.
- The financial services arm complements the automotive business, holding a 20% market share in car and motorcycle financing.
- Resilience in diversified sectors, including plantations and infrastructure, provides a hedge against industry-specific downturns.
Challenges and Risks
- Intensified competition from Chinese and Korean automakers, especially in the BEV segment.
- Macroeconomic uncertainties, including potential reductions in fuel subsidies and higher taxes on internal combustion engine (ICE) vehicles.
- Increasing operational costs due to VAT hikes and stricter credit conditions.
- Declining commodity prices, particularly in coal and palm oil, which could impact demand for motorcycles and heavy equipment.
Environmental, Social, and Governance (ESG) Practices
Astra International demonstrates a strong commitment to ESG principles. The company’s Astra Green Company initiative monitors environmental and occupational health and safety (EHS) standards. Through its Astra Green Energy program, the group has adopted energy-saving technologies and improved efficiency, with renewable energy accounting for 43% of its total energy consumption in 2022.
Social responsibility initiatives, aligned with Astra’s Public Contribution Roadmap, focus on health, education, environmental sustainability, and entrepreneurship. The company is also striving for gender diversity, with women comprising 10% of its workforce by the end of 2022.
Governance practices are robust, though there is room for improvement, such as increasing female representation on the Board of Commissioners (BoC) and Board of Directors (BoD) and appointing at least one independent director to the BoD.
