EQUITY RESEARCH

ASII – Company Update - 17 October 2019

CIPTADANA SEKURITAS ASIA

BUY Astra International

Another solid volume in September
TP: Rp7,900 (+23.9%)

Sector Automotive Astra car sales jump 10% in September, market share keeps gaining
Astra International (ASII) reported 10% MoM growth in car sales volume to 51.6 k units in
Bloomberg Ticker ASII IJ
Sep-19. This fared better than non-Astra’s volume of 41.4 k units (down 5% MoM),
Share Price Performance
resulting to Astra market share gaining by 300bps from 52% in August to 55% in Sep-19.
Strong growth was mainly supported by 9% and 14% increases in Toyota and Daihatsu
Last price (Rp) 6,375475 volume. On the LCGC segment, Astra reported 16% MoM growth in Sep-19 which we
Avg. daily T/O (Rpbn/USDmn) 208.1/14.7 believe came from the facelift models of Toyota Calya and Daihatsu Sigra recently
launched. LCGC segment accounted for 26% of total Astra’s volume. Astra cumulatively
3m 6m 12m
registered 396.2 k units of car volume in 9M19, which was down by 7% YoY , but still much
Absolute (%) -10.2 -15.3 -12.7 better compared to the 17% decline in non-Astra volume to 357.5 k units. This further lift
Relative to JCI (%) -5.8 -11.5 -20.7 Astra market share from 50% in 9M18 to 53% in 9M19. Overall domestic car sales volume
still saw a 12% YoY decline to 753.6 k units in 9M19.
52w High/Low price (Rp) 8,775/6,250
Toyota’s share rebounds, Daihatsu keeps rising
9,000 20%
Toyota remains the best-selling car in Sep-19 with 31.9 k units (34.4% share vs 32.2% in
8,000 15%
Aug-19). This is followed by Daihatsu (17.5 k units and 18.9% share vs Aug-19: 17.0%).
7,000 10%
Among non-Astra brands, Mitsubishi experienced the sharp decline in Sep-19 sales
6,000
5%
volume of 11% MoM to 12.7 k units, implying market share losses of 207bps to 13.7%. This
5,000
0%
could be due to the issues with the Mitsubishi Xpander's fuel pumps. Nissan sales volume
4,000 also declined by 6% MoM to 951 units, while Honda was the only brand registering
-5%
3,000 positive 4.4% monthly growth in sales volume to 12.4 k units, supported by strong sales
2,000 -10%
-15%
in Honda Brio Satya and Honda Brio RS.
1,000
0 -20%
Expecting stronger 3Q19 earnings
Oct-18

Dec-18

Feb-19
Sep-18

Nov-18

Sep-19
Mar-19

Aug-19
Jul-19
Jan-19

Apr-19
May-19
Jun-19

On quarterly basis, Astra car sales volume increased by 20% QoQ to 142.8 k units in 3Q19.
We believe this should help to improve Astra’s 3Q19 earning as car operation contributed
to around 27% and 15% of Astra’s consolidated revenue and earnings, respectively, in
ASII 1yr Rel. to JCI (RHS)
2Q19. Meanwhile, automotive division (car, motorbike and component) represented 43%
Outstanding shrs (mn) 40,484
and 39% Astra’s total revenue and earnings. We are waiting for September operating data
from UNTR, which might be released on 24 October, to forecast Astra’s 3Q19 earnings
Mkt. Cap (Rpbn/USDmn) 258,083/18,211 more accurately as this subsidiary also has significant contribution of 36% and 33% to
Estimated free float (%) 49.0 Astra’s 2Q19 revenue and earnings. In the last two years, 3Q earnings were 13%-24%
higher than 2Q due mainly to low base affected by long holiday in 2Q.
Major shareholders
Jardine Cycle & Carriage 50.1% Buy rating reiterated with TP of Rp7,900
Astra’s share price has tanked 21% year-to-date, on i) weak domestic car sales despite it
fared better than industry, and ii) weaker sentiment owing to declines in coal price and
CPO which affected UNTR and AALI valuations. We still believe Astra is potential
beneficiary of money to be relocated from investors reducing position in cigarette sector
EPS Consensus due to higher-than-expected excise hikes and ESG implementation. We retain our Buy
Ciptadana Cons. % Diff rating on ASII with TP of Rp7,900. The counter is trading at 11.3x 2020F PER, which is near
-2stdev historical mean. Astra’s share price underperformed the JCI by 8% on average in
2019F 491.4 538.1 -8.7 the last three years and we believe its current underperformance of 22% to JCI will
2020F 574.5 579.0 -0.8 narrow toward end of year.
2021F 648.7 621.0 4.5 Exhibit 1 : Financial Highlights
Year to 31 Dec 2017A 2018A 2019F 2020F 2021F
Revenue (Rpbn) 206,057 239,205 238,866 247,953 266,766
Operating profit (Rpbn) 20,326 26,868 26,951 29,994 31,506
Net profit (Rpbn) 18,881 21,760 19,894 23,256 26,261
EPS (Rp) 466.4 537.5 491.4 574.5 648.7
EPS growth (%) 24.6 15.2 -8.6 16.9 12.9

Arief Budiman EV/EBITDA (x) 10.7 8.8 8.5 7.3 6.6

+62 21 2557 4800 ext. 819 PER (x) 13.9 12.1 13.1 11.3 10.0

budimanarief@ciptadana.com PBV (x) 2.1 1.9 1.8 1.6 1.5

Dividend yield (%) 2.9 3.7 4.2 3.9 4.5
ROE (%) 15.3 15.9 13.6 14.6 15.1
http://www.ciptadana.com
Source : ASII, Ciptadana Estimates

This document is being provided for the exclusive use of BUDHY SIALLAGAN at PT MIRAE ASSET
Please see analyst certification and other important disclosures at the back of this report 2
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 EQUITY RESEARCH
ASII – Company Update - 17 October 2019
CIPTADANA SEKURITAS ASIA

Exhibit 2: Domestic car market share by major brands

40
(%)
35
30

25
20
15

10
5

0
Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19

Toyota Daihatsu Mitsubishi Honda Suzuki

Source: Gaikindo

Exhibit 3: Astra is trading close to -2stdev of historical average PER

13000
(x)
12000 21.5x

11000 18.5x
10000
16.5x
9000
8000 13.5x

7000
11.5x
6000
5000
4000
2015 2016 2017 2018 2019

Source: Bloomberg and Ciptadana

This document is being provided for the exclusive use of BUDHY SIALLAGAN at PT MIRAE ASSET
Please see analyst certification and other important disclosures at the back of this report 3
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 EQUITY RESEARCH
ASII – Company Update - 17 October 2019
CIPTADANA SEKURITAS ASIA

Exhibit 4 - Income Statement

Year to 31 Dec (Rpbn) 2017A 2018A 2019F 2020F 2021F
Revenue 206,057 239,205 238,866 247,953 266,766
COGS -163,689 -188,436 -188,090 -194,562 -210,750
Gross profit 42,368 50,769 50,776 53,392 56,016
Oper. expenses -22,042 -23,901 -23,825 -23,398 -24,510
Oper. profit 20,326 26,868 26,951 29,994 31,506
EBITDA 28,192 36,290 37,839 42,021 44,500
Interest income 1,982 1,859 1,889 1,605 1,720
Interest expense -2,042 -3,105 -3,966 -3,932 -3,187
Other income (exp.) 8,939 9,460 8,028 9,828 10,974
Pre-tax profit 29,196 35,082 32,902 36,795 41,012
Income tax -6,031 -7,623 -7,149 -7,995 -8,912
Minority interest -4,112 -5,699 -5,859 -5,544 -5,840
Net profit 18,881 21,760 19,894 23,256 26,261

Exhibit 5 - Balance Sheet

Year to 31 Dec (Rpbn) 2017A 2018A 2019F 2020F 2021F
Cash & cash equivalent 31,879 25,784 18,246 34,561 23,846
Acct, receivables 25,351 31,220 25,650 26,626 28,646
Inventory 19,504 26,505 30,919 31,983 34,644
Other curr, asset 44,559 50,100 53,792 55,275 57,919
Total current asset 121,293 133,609 128,607 148,445 145,055
Fixed assets - net 48,402 57,733 64,677 66,947 65,953
Other non-curr.asset 114,620 141,205 132,562 131,259 136,696
Total asset 295,646 344,711 338,011 358,815 359,867

ST debt + curr. maturity 43,584 45,529 41,104 41,752 40,404

Acct, payable 29,468 42,263 34,600 35,791 38,769
Advances received 4,465 5,051 3,550 3,685 3,965
Other curr. liab 21,205 23,624 19,985 20,873 20,511
Long term debt 31,394 40,385 39,794 39,448 18,718
Other non-curr, liab, 9,201 13,496 8,842 9,443 10,333
Total liabilities 139,317 170,348 147,875 150,991 132,699
Shareholder equity 123,645 136,947 146,004 159,313 173,946
Minority interest 32,684 37,416 44,131 48,510 53,221
Total liab + SHE 295,646 344,711 338,011 358,815 359,867

Exhibit 6 - Per Share Data

(Rp) 2017A 2018A 2019F 2020F 2021F
EPS 466.4 537.5 491.4 574.5 648.7
BVPS 3,054.2 3,382.8 3,606.5 3,935.3 4,296.7
DPS 187.2 233.2 267.7 245.7 287.2
FCF per share -8.2 -48.2 165.3 518.0 429.2

Source : ASII, Ciptadana Estimates

This document is being provided for the exclusive use of BUDHY SIALLAGAN at PT MIRAE ASSET
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 EQUITY RESEARCH
ASII – Company Update - 17 October 2019
CIPTADANA SEKURITAS ASIA

Exhibit 7 - Cash Flow

Year to 31 Dec (Rpbn) 2017A 2018A 2019F 2020F 2021F
Net income 18,881 21,760 19,894 23,256 26,261
Depreciation 7,866 9,422 10,888 12,027 12,993
Chg in working cap. -1,159 -75 -6,507 -849 -1,703
Other 4,254 -3,328 -8,832 -460 -2,727
CF-Oper activities 29,842 27,779 15,443 33,973 34,824

Capital expenditure -13,731 -30,721 -8,368 -6,173 -10,594

Others -16,442 990 -383 -6,828 -6,854
CF-Investing activities -30,173 -29,731 -8,751 -13,001 -17,449

Net change in debt 4,068 1,415 -5,016 302 -22,078

Net change in equity 0 0 0 0 0
Dividend payment -7,578 -10,489 -10,837 -9,947 -11,628
Other financing 6,150 4,732 2,061 4,980 5,602
CF-Financing activities 2,548 -4,342 -13,791 -4,665 -28,104

Net cash flow 2,217 -6,294 -7,099 16,307 -10,729

Cash - begin of the year 29,357 31,574 25,193 18,094 34,401
Cash - end of the year 31,574 25,280 18,094 34,401 23,672

Exhibit 8 - Key Ratios

Year to 31 Dec 2017A 2018A 2019F 2020F 2021F
Growth
Revenue (%) 13.8 16.1 -0.1 3.8 7.6
Operating profit (%) 15.9 32.2 0.3 11.3 5.0
Net profit (%) 24.6 15.2 -8.6 16.9 12.9
Profitability Ratios
Gross margin (%) 20.6 21.2 21.3 21.5 21.0
Operating margin (%) 9.9 11.2 11.3 12.1 11.8
EBITDA margin (%) 13.7 15.2 15.8 16.9 16.7
Net margin (%) 9.2 9.1 8.3 9.4 9.8
ROA (%) 6.4 6.3 5.9 6.5 7.3
ROE (%) 15.3 15.9 13.6 14.6 15.1
Liquidity Ratios
Current ratio (x) 1.2 1.1 1.3 1.5 1.4
Quick ratio (x) 1.0 0.9 1.0 1.1 1.1
Cash conversion cycle (days) 36.7 39.8 44.7 46.7 46.8
Activity Ratio
Inventory turnover (days) 43.5 51.3 60.0 60.0 60.0
Receivable turnover (days) 39.2 43.2 43.5 38.5 37.8
Payable turnover (days) 46.0 54.7 58.7 51.8 51.0
Solvency Ratio
Interest cover (x) 13.8 11.7 9.5 10.7 14.0
Debt to equity ratio (x) 0.6 0.6 0.6 0.5 0.3
Net debt to equity (x) 0.3 0.4 0.4 0.3 0.2

Source : ASII, Ciptadana Estimates

This document is being provided for the exclusive use of BUDHY SIALLAGAN at PT MIRAE ASSET
Please see analyst certification and other important disclosures at the back of this report 5
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 EQUITY RESEARCH
ASII – Company Update - 17 October 2019
CIPTADANA SEKURITAS ASIA

EQUITY RESEARCH

HEAD OF RESEARCH ANALYST ANALYST

Arief Budiman
Strategy, Automotive, Heavy Equipment,
Construction, Oil & Gas and Shipping
T +62 21 2557 4800 ext 819
E budimanarief@ciptadana.com
Erni Marsella Siahaan, CFA Yasmin Soulisa
Banking Property, Plantations
T +62 21 2557 4800 ext 919 T +62 21 2557 4800 ext 799
E siahaanerni@ciptadana.com E soulisayasmin@ciptadana.com

ECONOMIST ANALYST ANALYST

Nicko Yosafat Fahressi Fahalmesta Robert Sebastian
T +62 21 2557 4800 ext 820 Cement, Toll Road, Poultry Retail, Healthcare
E yosafatnicko@ciptadana.com T +62 21 2557 4800 ext 735 T +62 21 2557 4800 ext 760
E fahalmestafahressi@ciptadana.com E sebastianrobert@ciptadana.com

ANALYST ANALYST ANALYST

Gani Thomas Radityo Muhammad Fariz
Telco, Tower, Media Coal, Metal Mining Consumer, Cigarette
T +62 21 2557 4800 ext 734 T +62 21 2557 4800 ext 795 T +62 21 2557 4800 ext 740
E gani@ciptadana.com E radityothomas@ciptadana.com E farizmuhammad@ciptadana.com

TECHNICAL ANALYST RESEARCH ASSISTANT

Trevor Gasman Sumarni
T +62 21 2557 4800 ext 934 T +62 21 2557 4800 ext 920
E gasmantrevor@ciptadana.com E sumarni@ciptadana.com

EQUITY SALES

DIRECTOR OF INSTITUTIONAL EQUITY SALES

Dadang Mulyana
Plaza ASIA Office Park unit 2
Jl. Jend. Sudirman Kav. 59
Jakarta - 12190
T +62 21 2557 4800 ext 838
F +62 21 2557 4900
E mulyanadadang@ciptadana.com

BRANCH OFFICES

JAKARTA - MANGGA DUA JAKARTA - PURI KENCANA SURABAYA

Komplek Harco Mangga Dua Perkantoran Puri Niaga III Intiland Tower Surabaya
Rukan Blok C No.10 Jl. Puri Kencana Blok M8 No.2E Ground Floor Suite 5 & 6
Jl. Mangga Dua Raya Kembangan Jl. Panglima Sudirman 101-103
Jakarta - 10730 Jakarta - 11610 Surabaya - 60271
T +62 21 600 2850 T +62 21 5830 3450 T +62 31 534 3938
F +62 21 612 1049 F +62 21 5830 3449 F +62 31 534 3886

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Please see analyst certification and other important disclosures at the back of this report 6
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ASII – Company Update - 17 October 2019
CIPTADANA SEKURITAS ASIA

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Each contributor to this report hereby certifies that all the views expressed accurately reflect his or her personal views about the
companies, securities and all pertinent variables. It is also certified that the views and recommendations contained in this report are not
and will not be influenced by any part or all of his or her compensation.

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The information contained in this report is based on material we believe to be reliable; however, we do not represent that it is accurate,
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Disclaimer: This document is not intended to be an offer, or a solicitation of an offer, to buy or sell relevant securities (i.e. securities
mentioned herein or of the same issuer and options, warrants or rights to or interest in any such securities). The information and opinions
contained in this document have been compiled from or arrived at in good faith from sources believed to be reliable. No representation or
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other member of the Ciptadana Group of Companies from whom this document may be received, as to the accuracy or completeness of the
information contained herein. All opinions and estimates in this report constitute our judgment as of this date and there can be no
assurance that future results or events will be consistent with any such opinions, forecasts or estimates. The information in this document
is subject to change without notice; its accuracy is not guaranteed; and it may be incomplete or condensed.

This document is being provided for the exclusive use of BUDHY SIALLAGAN at PT MIRAE ASSET
Please see analyst certification and other important disclosures at the back of this report 7
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