Astra International (ASII) - Initiation

B-
Refinitiv ESG
INITIATION
Combined
Score
Company Note | Alpha series Autos │ Indonesia │ July 6, 2023
Indonesia
Astra International
ADD (no change)
Consensus ratings*: Buy 24 Hold 5 Sell 1
Regaining its automotive mojo
Current price: Rp6,800 ■ Astra International is one of our top picks among Indonesian large caps,
Target price: Rp7,925 given its 17% upside potential to our TP and 4.3% dividend yield in FY23F.
■ Toyota’s aggressive new model pipeline could lift Astra’s auto volumes and
Up/downside: 16.5% margins in FY23F, in our view. We do not see EVs as an immediate threat.
CIMB / Consensus: 4.4%
Reuters: ASII.JK Automotive business profitability set for new high
Bloomberg: ASII IJ We forecast Astra’s car market share in Indonesia to rise from 55% in 2022 to 57% in
Market cap: US$18,331m FY23F, lifted by new model launches from Toyota and Daihatsu. After overhauling its 7-
Rp275,288,160m seater MPV and city car line-ups, Toyota recently entered the fast-growing sub-Rp500m 5-
Average daily turnover: US$19.40m seater SUV segment and sub-Rp500m hybrid segment, with plans to ramp up its hybrid
Rp287,285m
model launches in the next 12 months. We think Toyota would see minimal competition in
Current shares o/s: 40,484m
the sub-Rp500m hybrid segment due to its expertise in hybrid cars. We expect Astra’s
Free float: 49.86%
*Source: Bloomberg Honda motorcycle sales to recover to pre-pandemic (FY19) levels in 2023F (+23% yoy),
lifting Astra’s FY23F automotive business net profit to a new high (+14% yoy).
Key changes in this note
N/A Why EVs are not an immediate threat to Astra
Some investors have been cautious on Astra due to the perceived electric vehicle (EV)
threat, given Toyota’s limited EV offerings. However, we think electric cars will see a slow
Price Close Relative to JCI (RHS)
7,500 119.0 pick-up in Indonesia, with EVs unlikely to exceed 10% penetration in the next two years
7,000 112.0 (May 23: 3%, based on industry association data). Our in-depth comparisons with
6,500 105.0
6,000 98.0 Thailand’s and China’s EV markets show that Indonesia has: 1) less aggressive EV
5,500 91.0 subsidies, 2) lower per capita income and more affordable subsidised fuel, and 3) a less-
5,000 84.0
300
developed charging network. We think EVs will remain a relatively niche product in the near
200
term in Indonesia, making it less of a threat to Astra; instead, we think Astra will benefit
Vol m
100
from the rising popularity of affordable hybrids as Indonesia transitions to EVs.
Jul-22 Oct-22 Jan-23 Apr-23
Source: Bloomberg
The drag from UNTR’s declining revenues should continue to ease
Price performance 1M 3M 12M After subsidiary United Tractors (UNTR) posted a record FY22 revenue due to the booming
Absolute (%) 0 14.8 11.9 mining sector, we forecast revenue to see a -12% CAGR over FY22-24F, before rising 2%
Relative (%) -0.5 16.9 11.8 in FY25F. We expect UNTR’s drag on Astra to peak in FY24F, with its contribution to
Astra’s revenue bottoming at 32%. At the same time, we estimate contributions to total
Major shareholders % held
Jardine Cycle & Carriage Ltd 50.111 revenue from the automotive and financing businesses to hit an 8-year high of 57% in
FY24F, helping Astra return to net profit growth in FY25F.
Our top pick among Indonesian large caps; initiate with an Add call
Insert
We initiate coverage on Astra with an Add rating given its revitalised automotive business.
Astra is trading at 9.5x FY23F P/E, below its five-year average of 11.5x 12M forward P/E.
This has more than priced in the near-term softness from UNTR, in our view. A repeat of
FY22’s high dividend payout is a potential catalyst as it would double dividend yield. Our
SOP-derived TP implies an 11.5x FY24F P/E, in line with historical mean. The 17% upside
potential to our TP is one of the highest among peers in our Indonesian large cap coverage.
Downside risks include rising automotive competition and worsening commodity prices.
Financial Summary Dec-21A Dec-22A Dec-23F Dec-24F Dec-25F

Revenue (Rpb) 233,485 301,379 296,932 294,470 305,166
Operating EBITDA (Rpb) 37,828 54,795 52,438 50,503 52,225
Net Profit (Rpb) 20,196 28,944 29,218 27,927 29,094
Core EPS (Rp) 525.9 761.9 717.7 689.8 718.7
Core EPS Growth 104% 45% (6%) (4%) 4%
FD Core P/E (x) 12.93 8.93 9.47 9.86 9.46
DPS (Rp) 282.0 640.1 288.7 275.9 287.5
Analyst(s)
Dividend Yield 4.15% 9.41% 4.25% 4.06% 4.23%
Hadi SOEGIARTO EV/EBITDA (x) 7.64 5.28 5.65 5.67 5.28
T (62) 21 3006 1720 P/FCFE (x) 17 NA NA 1,303 470
Net Gearing 3.66% 3.75% 3.52% (2.47%) (7.81%)
E hadi.soegiarto@cgs-cimb.com
P/BV (x) 1.60 1.43 1.41 1.30 1.20
Reynanda A. PURWOKO ROE 13.0% 16.9% 15.0% 13.7% 13.2%
T (62) 21 3006 1734 % Change In Core EPS Estimates
E reynanda.purwoko@cgs-cimb.com CGS-CIMB/Consensus EPS (x) 0.97 0.91 0.89
SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS
IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. IF THIS REPORT IS DISTRIBUTED IN Powered by the
THE UNITED STATES IT IS DISTRIBUTED BY CGS-CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. EFA Platform
Autos │ Indonesia
Astra International │ July 6, 2023
Auto business profitability set for new high

OUTLOOK
Indonesia’s car sales outlook
Car sales may be plateauing, but could still exceed Gaikindo’s guidance
We are starting to see signs of car sales plateauing as the post-Covid-19
pandemic economic reopening effects wear off. However, this was guided for by
the Association of Indonesian Automotive Manufacturers (Gaikindo), which
projected 2023F car sales at 975,000 units, or a 4% decline from 2022’s number.
Nevertheless, based on the strong 5M23 car sales achievement (+9% yoy for
wholesale, +13% yoy for retail), we think there is a chance of 2023F car sales
exceeding Gaikindo’s guidance. Even after accounting for the fact that 1H22 may
be a low base as the economy was just reopening, we still forecast 2023F car
sales growing by 2% yoy to 1.1m units, some 10% above Gaikindo’s guidance.
This is because we expect the numerous launches of new models that have
occurred in recent years to continue in 2H23F, ensuring momentum in new car
sales. From Astra’s side, Toyota and Daihatsu have launched a number of key
models in high volume segments YTD, and we think this will continue into 2H23F,
which should bode well for Astra’s market share numbers.
Toyota and Daihatsu are the current market leaders in Indonesia, with a combined
51% retail sales market share in 5M23, according to Gaikindo’s data. The two
brands contribute almost the entirety of Astra’s 55% Indonesia market share. The
current 55% share is high by Astra’s historical standards; in 2019 (pre-pandemic),
its market share was 52%.
It was during the Covid-19 pandemic (2020-22) that Astra’s market share
recovered from the lows of 2018-19, when it faced competition from new entrants,
such as Wuling, as well as aggressive legacy players like Mitsubishi and Hyundai.
We think the recent introduction of competitive new models by Toyota and
Daihatsu played a significant role in the increase in Astra’s market share.
Figure 1: Monthly car sales: wholesale and retail Figure 2: Cumulative 12M car sales
120,000 1,200,000 20%
1,100,000
100,000 15%
1,000,000
10%
80,000 900,000
800,000 5%
60,000
700,000
0%
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-5%
20,000 500,000
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Last 12M wholesale sales Last 12M retail sales

Wholesale sales Retail sales MoM growth wholesale sales (RHS) MoM growth retail sales (RHS)
SOURCES: CGS-CIMB RESEARCH, GAIKINDO SOURCES: CGS-CIMB RESEARCH, GAIKINDO
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Autos │ Indonesia
Figure 3: Retail sales market share Figure 4: Wholesale sales market share
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Toyota Daihatsu Mitsubishi Honda Toyota Daihatsu Mitsubishi Honda
Suzuki Hyundai Others Suzuki Hyundai Others
Toyota and Daihatsu have turned more aggressive, benefitting Astra

We think Astra’s strong car sales market share could be maintained, supported
by three factors:
1) Toyota and Daihatsu have become more aggressive in launching all new
models in their existing segments. This has been seen in the shorter life
cycles of popular models, such as the Avanza, Innova, and Agya.
2) Toyota and Daihatsu have also been expanding into new segments, such
as the compact SUV segment, which had traditionally been dominated by
Honda, e.g. with the launch of Toyota Yaris Cross. When both brands
launched the Toyota Raize and Daihatsu Rocky, they were also among
the first entrants in the new but popular subcompact SUV segment.
3) Toyota is dominant in the fast-growing full-hybrid segment, which already
accounted for 2.9% of total Indonesian wholesales car sales in 5M23, up
from just 0.5% in 2022, according to Gaikindo’s data. Toyota and Lexus
command a 99% market share in the full-hybrid segment, which excludes
mild hybrid. (We exclude mild hybrid because its fuel consumption is
much closer to that of a conventional internal combustion car than that of
a full hybrid.) Due to its hybrid expertise, we think Toyota should be able
to launch more affordable hybrid products in the near term to support its
high market share.
Toyota’s entry into these newer segments should bode well for margins, as these
products should yield higher margins than Toyota’s usual bread-and-butter
segments, such as mass market MPV and low-cost green car (LCGC), in our view.
There is also a waiting list for Toyota’s hybrid cars, based on our checks with car
dealers, allowing the carmaker to minimise discounts.
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Autos │ Indonesia
Figure 5: Toyota Innova Zenix Hybrid Figure 6: Toyota Yaris Cross Hybrid
SOURCES: CGS-CIMB RESEARCH, TOYOTA ASTRA MOTOR SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS
Figure 7: Toyota remains aggressive in launching new models – important models in the market are shown in bold
Brand Recent and upcoming new models Actual or estimated launch date Pricing range (Rp m)
Daihatsu Terios facelift Jun-23 236-300 (OTR)
Daihatsu SUV D66B Jul-05 300 (est)
Daihatsu Rocky e-Smart Hybrid Jul-05 N/A
Daihatsu All New Ayla Feb-23 134-190 (OTR)
Honda CRV 2023 Hybrid Jul-05 713-718 (est)
Honda Accord Hybrid Jul-05 670 - 800m (est)
Honda New Honda Brio 2023 May-23 165-243 (OTR)
Hyundai TBA (affordable EV) 2H23 200-300 (est)
Hyundai Casper Jul-05 start from 166 (est)
Hyundai Ioniq 6 EV Aug-23 (GIIAS) 696 (est)
Mitsubishi The New SUV (XFC) Aug-23 (GIIAS) 380-430 (est)
Mitsubishi Xpander Hybrid before Mar-24 N/A
Nissan All New Serena C28 (ICE and Hybrid) Jul-05 N/A
Suzuki Baleno Cross 2023 Jul-05 N/A
Suzuki XL7 2023 Hybrid Jun-23 256-305 (OTR)
Toyota All New Yaris Cross (ICE and hybrid) May-23 350-450 (OTR)
Toyota All New Toyota Rush (ICE and Hybrid) Nov-23 280-400 (est)
Toyota All New Alphard 2023 (ICE and Hybrid) 3Q23 N/A
Toyota Veloz Hybrid By 2024 (TBA) N/A
Toyota All New Agya Feb-23 168-253 (OTR)
Wuling 4x4 EV 2023 (TBA) N/A
Wuling Formo Max Jul-05 N/A
Wuling Victory Jul-05 N/A
Wuling Alvez Feb-23 209-295 (OTR)
SOURCES: OTODRIVER, KOMPAS, KUMPARAN, LIPUTAN6, TEMPO, CGS-CIMB RESEARCH, NEWS RESEARCH, COMPANY REPORTS
We have become less concerned about the Hyundai threat

Our previous concerns over the threat from Hyundai (Rating: Add, TP:
KRW270,000, CP: KRW206,500) on Astra’s market share have largely eased. In
2021-22, Hyundai launched key models in the high-volume compact SUV (5% of
total car sales) and LMPV segments (14% of total car sales).
After the initial spike in Hyundai’s market share to 5.1% in Sep 22 following the
new launches, Hyundai’s market share receded to 3.6% in 5M23, according to
Gaikindo’s data. Any potential incremental gain in the near term might be limited,
as Hyundai may not have easily adaptable global models for the remaining higher
volume segments, such as the city car segment (11% of total car sales, based on
industry association data) and the sub-Rp400m 7-seater SUV segment (12% of
total car sales), in our view. Based on the photo of a camouflage test car, as
reported by Liputan6.com, Hyundai may only make a small modification to its
Stargazer model to accommodate the 7-seater SUV segment.
4
Autos │ Indonesia
Other segments that Hyundai may enter also include the subcompact SUV
segment, but this segment only commands 4% of the market, with more than half
already coming from Toyota and Daihatsu. Ministry of Investment had indicated
that Hyundai may be developing an affordable electric car priced under Rp300m,
but we think it will be a relatively niche small EV.
Overall, we think Hyundai may not be as large a threat as Mitsubishi in the near
term, as Hyundai's current 4% market share is significantly lower than Mitsubishi's
market share following its Xpander launch, which had reached 11-15% in 2018
before starting to recede in 2022. The competition from Mitsubishi had resulted in
a significant dent to Astra’s market share and Astra’s de-rating in 2018, but we
think it will not recur in the case of Hyundai. Aside from Hyundai, the market share
of Wuling, another brand that was originally perceived by the market as a threat,
has moderated to just 3%, some six years after its establishment in Indonesia.
Figure 8: Retail sales market share – Hyundai gained market Figure 9: Retail sales market share – Mitsubishi gained market
share since 2021, propelled by new launches to 4% of retail share in retail sales significantly in 2018, following the Xpander
sales; however, it has stabilised of late launch, to 15% in Feb 18; however, it has now declined to 8%
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Toyota Daihatsu Hyundai Toyota Daihatsu Mitsubishi
Indonesia’s EV market outlook

EV adoption still facing challenges in Indonesia
Indonesia’s EV penetration is still in its infancy, with electric cars having only
captured a 3.5% market share as of May 23, according to Gaikindo’s data.
Moreover, full hybrid cars (excluding mild hybrid), which are ubiquitous in other
markets and often seen as a transition towards full EV, have only become popular
in Indonesia in the last six months, capturing a 2.7% market share in May 23. EV
and hybrid are generally seen as new technology in the Indonesian car market,
and for many, it may even be viewed as unproven technology, in our view. The
launch of Toyota Kijang Innova hybrid in Nov 22, a popular 7-seater MPV, marks
the first entry of hybrid technology into mass market cars.
The still relatively niche nature of EV can also be seen in the best-selling EV
models. Hyundai Ioniq 5, the current best-selling EV model, can be considered
more of a luxury car in Indonesia, as it is priced at US$45,000-52,000, significantly
above the Indonesian average new car price of US$20,000-25,000 (based on data
from Statista). Meanwhile, the second best-selling EV, Wuling AirEV (developed
by SAIC), is a micro car with a relatively limited range, preventing it from having
mass market appeal due to the lack of widely available charging points in most
parts of Indonesia. Plug-in hybrid EV (PHEV) offerings are surprisingly limited,
with close to zero market share among EVs.
5
Autos │ Indonesia
If we can narrow down the challenges to EV adoption, the top of the list include:
1) limited availability of affordable models, 2) a relatively affordable subsidised
gasoline price (at 67 US cents per litre), and 3) the slow development of charging
network. All three factors are especially relevant to Indonesia, a geographically
large country with a still developing GDP per capita of US$4,400.
Figure 10: Indonesia’s EV and hybrid car penetration Figure 11: Best-selling EV and hybrid cars YTD
6% Title:
4.9%
Source:
5%
4% Please fill in the values above to have them entered in you
3% Best selling EV and hybrid cars (4M23) Units

Toyota Kijang Innova Zenix Hybrid 5,483
2% 2.9%
Suzuki Ertiga Hybrid 2,712
1% Hyundai Ioniq 5 1,755
Wuling AirEV 989
0%
Toyota Corolla Cross Hybrid 470
May-22
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EV market share
Hybrid market share
Hybrid market share, excl. mild hybrid
Figure 12: Hyundai Ioniq 5 Figure 13: Wuling Air EV
SOURCES: CGS-CIMB RESEARCH, HYUNDAI MOTOR COMPANY SOURCES: CGS-CIMB RESEARCH, SAIC-GM-WULING
The challenges may not be easily addressed

Discussing the first challenge to EV adoption in Indonesia, the country currently
lacks an affordably priced mass market EV offering. Excluding the above-Rp500m
offering, which is not mass market, Indonesia only has the Wuling AirEV, a
relatively niche micro city car. To make electric cars mainstream, we think more
offerings are needed in the high-volume segments, such as 7-seater MPVs and
SUVs, compact 5-seater SUVs, and city cars.
Moreover, Wuling AirEV still sells in Indonesia for double the price it does in China
(US$16,000-20,000 in Indonesia vs. US$8,200-9,900 in China). This is also
noticeably higher than in India, where a rebadged Wuling AirEV is imported but
sells for US$9,600-12,000 (based on the company’s country website data). The
selling price is high despite the model being assembled in Indonesia with a
relatively high local content (which allows it to receive a 10% tax incentive).
We think Wuling’s ability to charge such high prices is partially due to the limited
global EV supply and lack of competition, especially from carmakers that can
manufacture affordable EVs domestically. Dongfeng’s recently introduced
competition is also priced relatively close to the Wuling AirEV. Indonesia’s Ministry
6
Autos │ Indonesia
of Investment had indicated that Hyundai may be developing an affordable EV at

a sub-Rp300m price, which could be launched by the end of 2023F. However, we
think it is highly possible that the developed model may also be a micro city car
with limited range and a target market similar to that of Wuling AirEV.
The lack of affordable offerings may not be easily addressed in the near term, as
there has been no news of other major Chinese EV players, such as BYD (Rating:
Add, TP: HK342, CP: HK262), building electric car plants in Indonesia yet
(although it has been reported by BloombergNews that BYD is considering
building an electric bus plant, which can source NMC battery materials
domestically in Indonesia).
Based on our discussions with a domestic car dealership competitor, BYD is
seeking an Indonesian partner to enter the market as it may be challenging to
compete without a domestic plant. BYD’s best-selling EV in Thailand, Atto 3,
which is priced at US$35,000, may become more expensive if imported, pricing it
out of the mass market, in our view.
The second challenge is relatively low gasoline prices, as Indonesian mass
market gasoline prices are subsidised. The price of mass market gasoline (RON
90) is often fixed for a relatively long time despite global volatility. Throughout most
of 2022, when global gasoline prices were rising, Indonesia’s RON 90 gasoline
price was fixed at below 50 US cents per litre for most of the year, as the
government tried to limit inflationary pressures. The usually unsubsidised RON 92
gasoline price was also partially subsidised for most of 2022. Thus, periods of high
gasoline prices, which may have accelerated EV adoption in other countries, have
had less of an impact in Indonesia, in our view.
Figure 14: Country comparisons of battery EV (BEV) market
BEV Average price

penetration (as GDP per of new car Number of Mass market
% of new car capita purchase Most popular electric car's price charging fuel price per
sales), 2022 (US$) (US$) (US$) Most popular electric car model (s) points litre (US$)
United States 5.6% 70,249 48,000 47,490 Tesla model Y 128,000 1.0
China 22.0% 12,556 23,530 4,649 Wuling Hongguang Mini EV 5,210,000 1.2
Malaysia 0.4% 11,109 38,960 32,761 BYD ATTO 3 900 0.4
Thailand 2.5% 7,066 30,600 31,766 BYD ATTO 3 3,700 0.9
Indonesia 1.0% 4,333 27,200 16,419 (AirEV), 57,450 (Ioniq 5) Wuling AirEV, Hyundai Ioniq 5 616 0.7
Phillipines 0.0% 3,461 26,810 44,819 BYD ATTO 3 300 1.0
India 1.5% 2,257 12,819 17,499 Tata Nexon EV 2,877 1.3
SOURCES: CGS-CIMB RESEARCH, IEA, World Bank, EVAT
Faster development of charging network is sorely needed for EVs to flourish

While Indonesia’s charging point per EV population of 23 is high compared to the
15-25 ratio seen across developed countries, according to data from IEA, we must
note that Indonesian EV penetration is still low. A doubling of EV penetration could
easily lower the charging point per EV to an insufficient number, in our view, as
Indonesia’s Ministry of Energy and Mineral Resources is targeting a 4W EV
population of 400,000 by 2025F, up from the current 14,000 units that have been
sold since 2019.
Such a target will require massive expansion in the charging network. Government
officials have mentioned that Indonesia may need 20,000 charging points to reach
the EV population target, up from the current 616 charging points. Based on recent
statements by state-owned electricity firm, PLN, there have been less than 30
charging point additions so far in 2023.
Subsidies are being rolled out to accelerate EV adoption, but less

aggressively than in China or Thailand
The government rolled out an EV purchase subsidy for cars in 1Q23. The VAT for
EV cars manufactured domestically with at least 40% local content has been
lowered from 11% to 1%, starting from Apr 23 until end-FY23F. The VAT discount
will be lower at 5-6% if the local content is between 20% and 40%.
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Autos │ Indonesia
This adds to the previous list of regulatory incentives to attract investments in the
EV industry, which include:
1. A 20-year tax holiday to be given for EV and EV parts manufacturing
investments, which also include battery manufacturing investments.
2. Super tax deduction of up to 300% on EV battery research and development
activities.
3. VAT exemption for mining products used for EV battery component
manufacturing, including nickel ore.
4. VAT exemption for capital goods imports, specifically for EV engine and
factory supplies.
5. Luxury goods sales tax (PPnBM) exemption for qualified domestic EV sales.
This is notably lower than the non-EV PPnBM rate which starts from 15%.
6. Import duty exemption for Incompletely Knocked Down (IKD) and Completely
Knocked Down (CKD) vehicle imports from countries that are on Indonesia’s
most favoured nation (MFN) list or part of the Free Trade Agreement (FTA),
or part of the Comprehensive Economic Partnership Agreement (CEPA),
which include Korea and China.
7. Vehicle title transfer fee (BBN) and motor vehicle tax (PKB) reduction of 90%
each.
The incentives seem to have borne fruit, with Bloomberg News reporting on 30
Mar 2023 that China’s BYD Automobile, one of the world’s largest EV makers, is
in talks to build an EV bus assembly plant and eventually a battery manufacturing
facility in Indonesia, possibly in Batang Industrial Park area. However, this is still
preliminary. The Coordinating Ministry of Maritime and Investment has also
mentioned that Indonesia is discussing with Tesla a potential investment. So far,
this has not resulted in any sizeable investment.
However, as Indonesia’s incentives are less aggressive than those in Thailand
and China, we expect Indonesia’s EV penetration to lag both these countries. A
missing key incentive is a cash subsidy for EV purchases, though we understand
that the Indonesian government may want to reserve this for EVs with higher local
content.
Thailand’s EV adoption case study: a cautionary tale for ICE carmakers but
may not be easily replicated in Indonesia
Figure 15: Thailand – EV car sales by type and EV car penetration
25000 3.0%
2.4%
2.5%
20000
2.0%
15000
1.3% 1.5%
1.1% 1.2%
10000 0.9%
1.0%
5000
0.5%
0 0.0%
2018 2019 2020 2021 2022
Plug-in hybrid electric vehicle (PHEV) car sales, units

Battery electric vehicle (BEV) car sales, units
% penetration rate to total car sales
SOURCES: CGS-CIMB RESEARCH, IEA
In Southeast Asia, Thailand provides an advanced blue print for its regional peers.
The Thai government has set a target of 30% of car production in the country to
be zero-emission vehicles by 2030. To support the goal, the Thai government has
been aggressive in providing regulatory incentives for EV, which include:
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Autos │ Indonesia
1. Excise tax reduction from 8% to 2%.

2. Import tax and stamp duty reduction from 40% to as low as 0% in the lowest
bracket until the end of 2023.
3. Subsidy of THB70,000-150,000 (US$2,000-4,300) based on battery capacity
for EVs priced below THB2m (US$57,500). Such direct cash subsidies are
currently not available in Indonesia.
To receive the incentives, a car manufacturer must commit to building an EV plant
in Thailand. In addition, the car manufacturer must commit to manufacturing a
certain number of EVs domestically for every imported EV that it sells and receives
the subsidy for before the EV plant is completed.
These forward-looking incentives have encouraged BYD and Hozon, a Chinese
EV maker backed by CATL (Rating: Add, TP: CY676, CP: CY225), to build their
factories in Thailand that could start producing as early as late-2023F. Besides
the newcomers, Chinese carmakers such as Great Wall Motor (Not Rated),
Dongfeng (Not Rated), and SAIC (Not Rated) have already established a
presence in Thailand.
The regulatory incentives have also resulted in sharply increasing EV penetration
in Thailand, with EV sales already accounting for 6.8% of total car sales in
Thailand in 1Q23 (up from 2.5% in FY22), according to data from CarNewsChina.
Chinese carmakers dominate the Thai EV space, especially in the high-volume
mass-market segment. BYD’s Atto 3, which is priced at around US$35,000, is
currently the EV sales leader in Thailand, capturing almost 40% of Thailand’s EV
sales in 1Q23, according to CarNewsChina. This is despite BYD only having 31
dealerships. Thailand’s second best-selling EV, Neta V, is priced at a relatively
affordable US$16,000.
Figure 16: Top 10 best-selling EVs in Thailand in 1Q23

Models Sales Shares
BYD ATTO 3 5,542 37.5%
Neta V 2,502 16.9%
Tesla Model Y 1,593 10.8%
Ora Good Cat 990 6.7%
MG 4 Electric 872 5.9%
MG EP 837 5.7%
MG ZS EV 768 5.2%
Tesla Model 3 670 4.5%
Volvo XC40 325 2.2%
Volvo C40 200 1.4%
SOURCES: CGS-CIMB RESEARCH, CARNEWSCHINA.COM
There has also been an increase in the number of EV models being offered,
including at mass market price points. At the end of 2022, there were already 20
EV models being offered, compared to less than 10 in Indonesia. In Thailand, the
hybrid market share is also being taken away by EV, which is a development that
is not in favour of legacy carmakers, in our view. However, if there is any positive
point in the context of Astra in Indonesia, China EVs in Thailand have mostly been
grabbing market share away from Honda and Mitsubishi so far, less so from the
market leader Toyota, based on data from Federation of Thai Industry.
Lastly, Thailand has seen a sharp increase in charging points; it currently has
3,700 charging points (vs. Indonesia’s 616 that are operated by the state-owned
electricity firm). The 3,700 charging points have the potential to double every year,
according to the Electric Vehicle Association of Thailand.
Overall, Thailand shows the many challenges that Indonesia still needs to tackle
to increase its EV penetration, particularly in the area of regulatory incentives and
buyer-readiness for EV, which could partially be explained by Thailand’s higher
GDP per capita, in our view.
9
Autos │ Indonesia
Case study of China’s EV market: a blue-sky blueprint for EV adoption

Although we think Indonesia is unlikely to follow China’s EV adoption rate in the
near term, the Chinese car market offers lessons on the key factors to monitor
and how a strong alignment of the factors can disrupt the car industry.
China is currently experiencing one of the fastest EV adoption rates in the world,
not unlike how e-commerce rapidly upended China’s retailing in the 2010s.
Penetration of China’s new energy vehicles (NEV) sales, which includes battery
EV (BEV) and plug-in hybrid EV (PHEV), grew from 6% in 2020 to 16% in 2021
and 33% in 1Q23, according to CGS-CIMB Research’s China auto analyst Ray
Kwok, in his report China NEV market: fast growing but very competitive, dated
14 Apr 2023. In a previous report, NEV market: growing fast but competitive, dated
30 Dec 2022, he wrote that the number may reach 55% of new car sales by 2025F.
Within the 33% NEV penetration in 1Q23, BEV sales made up c.71% of total NEV
sales, with the rest coming from PHEV.
Figure 17: China’s NEV/BEV sales – passenger car only (in m Figure 18: China’s NEV/BEV penetration
units)
2.5 90%
80%
2 70%
60%
1.5
50%
40%
1
30%
0.5 20%
10%
0 0%
1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
China NEV penetration rate (to total passenger car sales)

China NEV sales China BEV sales BEV penetration rate (to NEV sales)
SOURCES: CGS-CIMB RESEARCH, CAAM SOURCES: CGS-CIMB RESEARCH, CAAM
Figure 19: China’s NEV shipments and penetration
800,000 40%
700,000 35%
600,000 30%
NEV penetration rate (%)
No. of NEV sales (units)
500,000 25%
400,000 20%
300,000 15%
200,000 10%
100,000 5%
0 0%
Jul-20
Jul-21
Jul-22
Jan-22
Jan-20
Jan-21
Jan-23
Apr-20
Oct-20
Apr-21
Oct-21
Apr-22
Oct-22
No. of NEV sales NEV penetration (%) - RHS
SOURCES: CGS-CIMB RESEARCH, CAAM
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Autos │ Indonesia
Figure 20: China’s NEV shipments and penetration rate to total PV
14 13.0 70.0%
12 60% 60.0%
10.0
10 50.0%
47%
7.7
8 40.0%
6.5 36%
6 30.0%
28%
4 3.3 20.0%
16%
2 1.1 1.1 1.3 10.0%
6.2%
4.6% 5.0%
0 0.0%
2018 2019 2020 2021 2022 2023F 2024F 2025F
No. of NEV sales (m units) NEV/ Passenger vehicle sales penetration rate in China
SOURCES: CGS-CIMB RESEARCH ESTIMATES, CAAM
The rising EV penetration in China is enabled by several factors, including

supportive government policies, competitive EV offerings, and the rapid
expansion of charging networks, in our view. The supportive environment has
resulted in high competition between EV manufacturers, with some operating at a
loss. From a consumer perspective, this has resulted in highly competitive EV
offerings across price categories and more affordable choices (sub-US$10,000).
To encourage NEV production, the government has also been penalising
carmakers that do not produce a certain amount of NEV as % of their total
production (set at 14-18% in 2021-23F). This is to support the government’s target
of requiring all new vehicles sold in China by 2035F to be powered by 'new energy'.
This specifically means half of them must be electric, fuel cell, or plug-in hybrid,
with the remaining being hybrid vehicles. On the purchase subsidy side, in 2019,
China’s government had provided a purchase subsidy of around US$1,400-3,500
for NEV priced below US$42,000. This had been declining in amount until it was
discontinued at the end of 2022.
Aside from the purchase subsidy, there were also tax exemptions for NEV in 2014
amounting to c.US$1,540. Regional governments in China have also introduced
their own regional EV incentives, as some cities have been exempting NEV from
the regulated licence plate quota, offering parking discounts for EV, and subsiding
the charging fees at charging points. There are currently 1.8m charging points in
China, which could increase to 5.7m in 2025F, based on a forecast by Frost &
Sullivan.
Figure 21: Major supportive government policies in China for consumers (demand side) and automakers (supply side)
Demand-side policy Description
NEV purchasing tax exemption The tax exemption first begin in 2014, allowing most consumers who buy NEVs to save about RMB10,000 relative
to those who buy traditional fuel vehicles, given that the purchase tax rate for internal combustion engine vehicles
was 10%. The policy has been extended to the end of 2022, and recently the government confirmed that it would
be further extended.
Supply-side policy
Parallel credit administration The policy required automakers to meet the CAFC and NEV credit targets set by the government. The current NEV
credit target is based on 14%/16%/18% of the vehicle output of the manufacturer itself in 2021/2022/2023F.
Automakers can trade their extra credit to earn income but will be penalised if they do not meet the targets.
Charging network expansion China has the largest charging infrastructure networks for NEVs in the world, with over 1.3m public charging piles.
Most of these charging piles are located in regions such as Guangdong, Shanghai and Beijing. The central
government planned to expand the charging coverage for at least 60% of expressway service areas by 2025F.
Sodium-ion battery development In the 14th Five-Year Plan (2021-2025), the central government encouraged the development of the sodium-ion
battery industry to guarantee a fair EV market structure by offering different types of batteries of the market.
SOURCES: CGS-CIMB RESEARCH, CHINA STATE COUNCIL
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Autos │ Indonesia
Figure 22: Relevant policies/announcements for NEV Industry in China (Jan 2019 to Mar 2023)
Date Department Policy Type Policy Details
2023
Mar-23 Beijing Municipal Commerce Bureau Financial Beijing NEV Purchase Subsidy Scheme 2023
Policy - Between March 1 and August 31, Beijing residents who transfer or scrap
passenger vehicles they have owned for more than a year and buy NEVs
can receive a subsidy of up to RMB 10,000.
Mar-23 Hefei Municipal People's Government Financial Hefei New Car Subsidy Scheme 2023
Policy - Between 4 Feb and 30 Jun, individual consumers who scrap or sell non-
business passenger cars that are registered in Hefei and meet relevant
standards under their own name, and purchase new non-business new
energy passenger cars from sales agencies registered with the Hefei State
Administration for Market Regulation (SAMR) in an amount of RMB50,000,
RMB100,000 and RMB200,000, are granted government subsidies of
RMB1,000, RMB3,000 and RMB5,000 per car, respectively.
Mar-23 Xi'an Municipal People's Government Financial Xi'an NEV Purchase Subsidy Program 2023
Policy - Between 21 Mar and 30 Apr, consumers who buy a NEV produced by a
local carmaker in Xi'an will receive a subsidy of up to RMB 6,000.
- Local consumers who install their own charging facilities by 31 Dec 2023F
will receive a subsidy of RMB 10,000.
Jan-23 Shanghai Municipal People's Financial Shanghai NEV Purchase Subsidy Scheme 2023
Government Policy "- Individual consumers who scrap or transfer their Shanghai-registered
vehicles and purchase purely electric vehicles by 30 Jun 2023, will receive a
financial subsidy of RMB 10,000 per vehicle.”
2022
Dec-22 China State Council Financial Termination of purchase subsidy on 1 Jan 2023
Ministry of finance and other Policy - Subsidy in 2022: Rmb4800/each new PHEV, maximum Rmb12,600/each
government departments new BEV
- Terminated on 31 Dec 2022, all EV bought after this date will not receive
any subsidy from the government.
- Officially comes to an end after its launch in 2013.
China State Council Infrastructure Removal of restrictions on the relocation of small non-operational used
Policy cars
- further release the potential of automobile consumption, activate the
second-hand car market.
- promote automobile renewal consumption, in order to boost NEV market
penetration
- booster for NEV sales, to replace the effect brought by financial subsidy
Sep-22 China State Council Financial Confirmation on the extension of NEV purchase tax exemption
Policy - To confirm that the country's purchase tax exemption for NEVs will be
renewed next year
- To increase the number of quotas and relax restrictions on eligibility to
purchase cars
Jun-22 Ministry of Finance Financial Tax cut policy on low-emission passenger vehicles
the General Administration of Taxation Policy - To halve the car purchase tax for passenger vehicles priced at no more
than RMB 300k and
with 2-liter or smaller engines, which last from 1 Jun 2022 to the end of 2022
- To limit tax exemption on purchasing passenger cars, with no more than
nine seats
Jan-22 The National Development and Infrastructure Guidelines for expanding electric vehicle charging infrastructure
Reform Policy
Commission and other nine - To expand charging services for electric vehicles to meet the demand of
government departments 20m vehicles by 2025F
- To have rapid charging stations for no less than 60% of expressway service
areas in the country by 2025F
- To equip rapid charging stations for no less than 80% of national ecological
civilisation pilot
zones and key areas for air pollution prevention and control by 2025F
- To strengthen maintenance and Internet services for charging facilities
- To improve battery charging and swapping capabilities in urban and rural
areas
2021
Mar-21 China State Council Overall The 14th Five-Year Plan of the People’s Republic of China
Policy - To focus on higher quality and standards for NEV manufacturing
- To promote the development of Na-ion battery industry
- To launch or extend incentive policies for NEVs, such as tax exemptions,
preferable loans, and co-financing
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Autos │ Indonesia
- To encourage development of battery recycling industry and highlight the

importance battery design and production, quality control, packaging and
transportation, etc.
2020
Dec-20 Ministry of Finance Financial Improvement of the financial subsidy policy for the promotion and
Policy application of NEVs
Ministry of Industry and Information - To provide subsidy for NEVs priced below Rmb300k or NEVs with battery
Technology swapping services
Ministry of Science and Technology - To steadily reduce direct per vehicle subsidies by 10%, 20%, and 30% each
year of between
National Development and Reform 2020 and 2022, respectively, on previous year's subsidy basis
Commission
Oct-20 China State Council Overall The New Energy Vehicle Industry Development Plan (2021-2035)
Policy - To increase the scale of R&D of EVs' operating system and power batteries
- To strengthen the EV charging and hydrogenation infrastructure by
developing a public fast-charging network, providing funds for facility
construction, and encouraging the battery exchange mode
- To enhance international cooperation for new energy vehicles
- To issue a new policy to support the use of new energy vehicles
- To reach 80% NEV penetration for the entire public sector, such as public
transport, logistics, and distribution vehicles
Aug-20 Ministry of Transport Infrastructure Guiding opinions on the construction of new infrastructure in the field
Policy of transport
- To build intelligent transportation system (ITS) infrastructure
- To gradually introduce intelligent trains, self-driving vehicles and intelligent
ships in the transport system
Apr-20 State Taxation Administration Financial Catalogue of NEVs exempted from vehicle purchase tax
Ministry of Industry and Information Policy - To exempt NEVs from vehicle purchase tax, including EVs and PHEVs
Technology
- To encourage NEV transition by consumers
2019
Jul-19 Ministry of Industry and Information Infrastructure Phase V fuel consumption standards for passenger vehicles (GB 27999-
Technology Policy 2019)
- To change the calculation method for maximum fuel consumption limits
- To add referral indexes for calculating CO2 emissions for gasoline and
diesel vehicles
Jun-19 12 Ministries in total, including the Promotion Green Travel Action Plan
Ministry of Travel Policy
- To promote green travel
- To improve quality of public transport services
- To raise people's awareness of the benefits of green travel
SOURCES: CGS-CIMB RESEARCH, CHINA STATE COUNCIL
In terms of market share, BYD and Tesla are still the leaders in China’s NEV
segment. BYD achieved a market share of around 38% in 1Q23, followed by Tesla
with market share of 16%, based on CNEVPost data. BYD’s market share has
steadily risen from 11% in 1Q21 to 38% in 1Q23, a success that is now being
repeated in the Thai market. BYD’s rise in China was primarily driven by the
company's strong supply chain control, which helped it maintain a high level of
stability during difficult periods caused by production and supply challenges, as
well as the Covid-19 disruptions, in our view. It has also been aggressive in
releasing competitive models across price ranges.
BYD has not entered Indonesia, but we think it is an important player to keep an
eye on as there have been preliminary talks of BYD setting up operations in
Indonesia. We think establishing a domestic manufacturing plant will be necessary
if BYD intends to penetrate Indonesia’s mass market segment.
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Autos │ Indonesia
Figure 23: China’s EV makers NEV sales, by volume (2021 vs. Figure 24: China’s emerging EV manufacturers’ quarterly market
2022) shares (%): BYD and Tesla have 37% and 15% market shares,
respectively, in 1Q23
- 500,000 1,000,000 1,500,000 2,000,000 9%
8%
BYD
7%
Tesla
6%
Market share (%)

Aion (by GAC)
5%
Li Auto
4%
XPeng
3%
NIO
2%
Leadmotor
1%
Zeekr (by Geely) 0%
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
3Q21
4Q21
1Q22
2Q22
3Q22
4Q22
1Q23
Sales volume
2021 2022
NIO XPeng Li Auto Aion Neta Zeekr
SOURCES: CGS-CIMB RESEARCH, CAAM SOURCES: CGS-CIMB RESEARCH, CAAM
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Autos │ Indonesia
Figure 25: BYD’s NEV portfolio as of 7 Jun 2023
Wheelbase Acceleration time Peak Power Maximum Torque Autonomous driving MSRP starting
Model Delivery Date Segment Driving range (km)
(mm) (0 to 100km/h) (s) (kW) (NM) package from (RMB)
QIN Plus DM-p/i

2016
Mid size A-class Sedan

Mar-16 2,718 55/120 7.3/7.9 81 135 Dipilot 111,800 - 151,800
(BEV)
TANG
2018
Jul-18 Mid-large size SUV (BEV) 2,820 505/565 4.4/8.9 168/180/380 350/700 Dipilot 279,800 - 339800
TANG DM-p/i
2018
Jul-18 Mid-large size SUV (PHEV) 2,820 112/252 4.3 (0-50) 102 231 Dipilot 205,800-279,800
YUAN / YUAN PLUS

2018
Mid Size A-Class SUV

Jun-18 2,720 430/510 7.3 150 310 Dipilot 137,800-165,800
(BEV/PHEV)
HAN
2020
Mid size B/C-class Sedan

Jul-20 2,920 550/550/605 3.9/7.9 163/363 350 Dipilot 214,800 - 234,800
(BEV)
HAN DM-p/i
2020
Mid size B/C-class Sedan

Jul-20 2,920 121/242 7.9 102 231 Dipilot 215,800-289,800
(PHEV)
SONG PLUS EV
2020
Sep-20 Mid large size SUV (BEV) 2,765 505 4.4(0-50) 135 280 Dipilot 180,800-197,800
SONG PLUS DM-p/i

2020
Sep-20 Mid large size SUV (PHEV) 2,765 51/100/110 5.9/7.9/8.5 132/145 316/325 Dipilot 145,800-172,800
Dolphin
2021
Subcompact A0-class sedan

Aug-21 2,700 301/405/401 3.9/3 (0-50) 70/130 180/290 Dipilot 102,800-130,800
(BEV)
Destroyer 05
2022
Mar-22 Sedan (BEV) 2,718 55/120 7.3/7.9 132/145 316/325 Dipilot 119,800-155,800
Seal
2022
Late 2022 Sedan-Coupe (BEV) 2,920 550/650/700 3.8/5.9/7.5 150/230 310/360 Dipilot 209,800-286,800
Frigrate 07
2022
Late 2022 Mid Large SUV (PHEV) 2,820 100/175/205 4.7 145/150 102/231 Dipilot 220,000-280,000
Danza D9
2022
May-22 Premium MPV (BEV/PHEV) 3,110 620 / 166/230 / Dipilot 389,800-459,800
Yangwang U8
2023
Luxury G-Class off-roading

Jan-23 3,050 / / 220/240 320/420 / 800,000-1,500,000
vehicle (BEV)
SOURCES: CGS-CIMB RESEARCH, BYD
Conclusion regarding EV threat to incumbents in Indonesia: safe for now,

but we will be monitoring for years to come
As evidenced globally, when the factors are aligned, EV sales can take off quickly.
This is a development worth monitoring as Astra’s car business prospects may be
tied to how fast EVs are being adopted in Indonesia and how quickly its brand
partners, particularly Toyota and Daihatsu, can adapt to a changing environment,
in our view.
As we have discussed, there are clear challenges, such as slow EV adoption in
the mass market segments, particularly given the lack of affordable EV offerings,
which may not easily be addressed quickly due to insufficient domestic EV
competition and the fact that Thailand is currently developing as the Southeast
Asian electric car hub faster than Indonesia.
The emergence of LFP batteries as the dominant battery among Chinese EV
manufacturers, as opposed to NMC batteries, which are more easily produced in
15
Autos │ Indonesia
Indonesia, could reduce Indonesia’s attractiveness as an electric car

manufacturing hub, although NMC has other use cases that can still support
Indonesia’s downstreaming efforts, in our view. As a result, the Indonesian
government has been treading carefully in the formulation of its EV subsidies,
especially if they do not encourage domestic EV manufacturing.
We think unless EV prices come down significantly in the next few years, it may
be difficult for EVs to truly compete in the sub-Rp500m (US$33,000) mass market
segments without having strong domestic manufacturing. Like most emerging
markets, Indonesians are also very brand loyal and conservative, choosing to stick
with tried-and-tested brands with wide aftersales networks, such as Toyota and
Daihatsu. As an example, Wuling has been struggling to gain a sizeable market
share since it started selling in 2017. This has also been seen in Thailand, where
the rise in EV has only significantly impacted the market share of non-Toyota
brands.
If EV adoption is slow in Indonesia, this would give Toyota and Daihatsu a longer
time to adapt and produce more competitive EV offerings. As Toyota has only
turned more aggressive in offering its hybrid offerings in Indonesia from 2H22, we
think there is still ample opportunity for Toyota to introduce hybrid and PHEV
models, especially in the sub-Rp400m pricing. If EV competition intensifies, we
think Toyota and Daihatsu are better equipped to protect their market shares than
brands like Honda, Mitsubishi, and Suzuki, due to Toyota’s strong expertise in the
hybrid segment.
BYD has been posting job openings on Indonesian job listing websites, indicating
that it may be setting up operations in Indonesia, though we have yet to hear of
any concrete plans to build an electric car manufacturing plant in Indonesia. BYD
can start selling cars in Indonesia once its 150,000 cars p.a. plant in Thailand
opens in 2024, but we think its popular Atto 3 model could be priced above
Rp500m if it is imported into Indonesia, making it a relatively non-mass market
model.
Figure 26: BYD Song Plus EV Figure 27: BYD Atto 3
SOURCES: CGS-CIMB RESEARCH, BYD, CARNEWSCHINA.COM SOURCES: CGS-CIMB RESEARCH, BYD
Motorcycle sales outlook

A bright spot as sales continue to recover towards pre-pandemic levels
Indonesian motorcycle industry association (AISI) targets 2023F motorcycle sales
of 5.4m-.5.6m units, growing by 3-7% from 2022’s achievement of 5.2m units. We
think this is conservative, as the 5M23 achievement suggests that motorcycle
sales are on track to end the year close to 2019’s pre-pandemic sales of 6.5m
units. Motorcycle sales have so far been unfazed by the Sep 22 fuel price hike.
We are projecting industry motorcycle sales to grow by 23% to 6.4m units in 2023F,
with Astra’s motorcycle sales growing by 25%. Astra’s share of the Indonesian
motorcycle market, coming from Honda motorcycles, has been resilient at around
80%. While we do not expect CPO prices to rebound significantly for the rest of
2023F (high CPO prices have historically been a catalyst for motorcycle sales),
16
Autos │ Indonesia
the trickle down of election spending may give an additional sales boost in 2H23F
and 1Q24F, in our view.
Figure 28: National monthly 2W sales Figure 29: 12-month rolling 2W sales
800,000 9,000,000 50%
40%
700,000
8,000,000
30%
600,000
20%
7,000,000
500,000 10%
400,000 6,000,000 0%
-10%
300,000
5,000,000
-20%
200,000
-30%
4,000,000
100,000 -40%
- 3,000,000 -50%
Jun-07
Jan-12
Jun-18
Jan-23
Jul-06
Jul-17
Dec-01
Nov-02
Sep-04
Aug-05
Oct-03
Feb-11
Dec-12
Nov-13
Sep-15
Aug-16
Oct-14
May-08
Apr-09
Mar-10
May-19
Apr-20
Mar-21
Feb-22
Jan-14
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
National monthly 2W sales 12-months rolling 2W sales yoy growth
Figure 30: Indonesia’s 2W monthly sales vs. CPO price Figure 31: ASTRA’s 2W market share (Honda motorcycles)
800,000 1,800 2,500,000 90%
1,600 80%
700,000
2,000,000 70%
1,400
600,000
1,200 60%
500,000 1,500,000
50%
1,000
400,000
40%
800 1,000,000
300,000 30%
600
200,000 500,000 20%
400
10%
100,000 200
- 0%
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16
1Q17
3Q17
1Q18
3Q18
1Q19
3Q19
1Q20
3Q20
1Q21
3Q21
1Q22
3Q22
1Q23
- 0
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Jan-23
Total national motorcycle sales Astra motorcycle sales

National monthly 2W sales Malaysia FOB CPO price, US$/tonne (RHS) ASII 2W market share (RHS)
Financial services outlook: lifted by strong

automotive business
As Astra’s financing subsidiaries (Astra Sedaya Finance, Ferederal International
Finance, Toyota Astra Finance, and SAN Finance) are mainly lending to
customers of Astra’s automotive and heavy equipment businesses, the near-term
prospects should be positive, in our view. As discussed in previous sections, we
think Astra’s car sales will remain solid, while motorcycle sales should see good
momentum for the rest of 2023F.
Moreover, Astra financing subsidiaries’ asset quality and economies of scale
should continue to improve as they recover from the Covid-19 pandemic. Due to
their size as market leaders and strong captive market, we think Astra’s financing
subsidiaries have weathered the pandemic better than the rest of the industry,
putting them in a better position now than the weakened competition. During the
pandemic, the financing industry experienced a consolidation, as the number of
financing companies fell by 19% from Dec 19 to Sep 22, when it stood at 154
17
Autos │ Indonesia
companies, according to CGS-CIMB’s banking analyst Handy Noverdanius report,

BFIN: An alternative to Indonesian banks, dated 5 Jan 2023.
Asset quality should also improve as the economy moves away from the
pandemic and the inflation spike post fuel price increase in Sep 22. Indonesia’s
financing companies’ NPL receded to 2.6% in Sep 22, after spiking at 5.6% during
the height of the pandemic in Jul 22. The 2.6% is near to the pre-pandemic NPL
of 2.4% in Dec 19, indicating that the sector is close to making a full recovery.
Likewise, cost of credit (CoC) has receded to 3.8% in Sep 22, after reaching a
pandemic peak of 9.7% in Apr 20, based on OJK data.
Like the industry, the metrics of Astra’s key financing subsidiaries, Astra Sedaya
Finance and Federal International Finance, have been improving. These include
moderating cost of credit, declining overdue loan percentage, and rising
provisioning coverage. Aside from asset quality, cost-to-income ratio has also
been improving as the subsidiaries regain their economies of scale.
Figure 32: Indonesia’s financing companies and market share – Figure 33: Indonesia’s financing companies’ receivables amount
number of non-top 10 market players has declined, along with a (Rp bn)
drop in the number of players
issuance of OJK regulation i.e broader scope of financing
companies such as providing cash loan (Dana Tunai),
120.0% 185 190 500,000
under multipurpose loan
Title:
184
185 450,000 Source:
100.0%
57.8% 54.8% 176 180 400,000
80.0% 175 350,000
Please fill in the values above to have them entered in you
53.5% 50.6%
170 300,000
60.0%
161 165 250,000
40.0% 160 200,000
155
20.0% 150,000
150
100,000
0.0% 145
2018 2019 2020 2021 50,000
-
Jun-17
Jun-18
Jun-20
Jun-21
Mar-17
Mar-18
Jun-19
Mar-20
Mar-21
Jun-22
Mar-19
Mar-22
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Sep-17
Sep-19
Sep-20
Sep-22
Sep-16
Sep-18
Sep-21
Astr a S edaya (ACC) FIF Indomobil (IMJS)
Dipo Star Adir a Fina nce Toyota Astra (TA F)
Mandir i Tunas (MTF) BFI Finance (BFIN) Busan Auto Finance (BAF)
BCA Fi nance Others exclud e top 10 No. of players Investment Working Capital Multipurpose Others Sharia Financing
SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS SOURCES: CGS-CIMB RESEARCH,OJK
Figure 34: Financing companies’ credit cost (COC) trend – 2022 Figure 35: Indonesia’s system non-performing financing (NPF)
COC almost back to pre-pandemic levels
12% 4,000 6.00% Title:

3,500 Source:
10%
5.00%
3,000
2,500 4.00%
6% 2,000
1,500 3.00%
4%
1,000
2% 2.00%
500
0% - 1.00%
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Jul-18*
Jul-17
Apr-18*
Jul-19
Jul-20
Oct-20
Jul-21
Oct-21
Jul-22
Apr-17
Oct-17
Oct-18
Apr-19
Oct-19
Apr-20
Apr-21
Apr-22
0.00%
Jun-20
Jun-21
Jun-22
Mar-17
Jun-17
Mar-18
Jun-18
Mar-19
Jun-19
Mar-20
Mar-21
Mar-22
Dec-16
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Sep-16
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Sep-22
Financing Loss Reserve Expense (monthly) Rp bn - RHS-

CoC (monthly annualized)
Average during the year NPF
SOURCES: CGS-CIMB RESEARCH, OJK SOURCES: CGS-CIMB RESEARCH, OJK
18
Autos │ Indonesia
Figure 36: Indonesia’s system 4W based financing (Rp bn) Figure 37: Indonesia’s system 2W based financing (Rp bn)
300 120 Title:

Source:
250 100
Please fill in the values above to have them entered in you

200 80
150 60
100 40
50 20
- -
May-22
Jun-19
Jun-21
Jan-22
Jun-20
Feb-19
Feb-20
Feb-21
Mar-22
May-22
Oct-19
Apr-20
Apr-21
Jul-22
Apr-19
Oct-20
Jun-19
Jun-21
Jan-22
Jun-20
Feb-19
Feb-20
Feb-21
Mar-22
Aug-19
Aug-20
Aug-21
Sep-21
Sep-22
Dec-18
Dec-19
Dec-20
Nov-21
Oct-19
Apr-20
Apr-21
Jul-22
Apr-19
Oct-20
Aug-19
Aug-20
Aug-21
Sep-21
Sep-22
Dec-18
Dec-19
Dec-20
Nov-21
Commercial Truck 4W - New 4W - Used Total 4W 2W - New 2W- Used Total 2W
Figure 38: Indonesia’s system HE & machinery based financing Figure 39: Indonesia’s system financing receivables based on
(Rp bn) location – Kalimantan and Sumatera gaining traction
60 100% Title:
90% Source:
50 80%
40 60%
50%
30 40%
30%
20 20%
10%
10 0%
Apr -21
Apr -22
Oct-21
Nov-18
Dec-21
Sep -18
Sep -16
Nov-16
May-17
Sep -17
Nov-17
Nov-19
Aug -21
May-18
May-19
Sep -19
May-20
Sep -20
Nov-20
Dec-20
Aug -22
Jul-17
Jul-18
Jul-20
Jul-19
Feb-21
Feb-22
Jan-17
Mar-17
Jan-18
Jan-19
Jan-20
Jun-21
Mar-18
Mar-19
Mar-20
Jun-22
-
Java Sumatera
Kalimantan Sulawesi, Maluku, and Papua
Heavy Equipment Machinery Total HE & Machinery Bali and Nusa Tenggara Outside Indonesia
Figure 40: Astra Sedaya Finance CIR and CoC ratio Figure 41: Astra Sedaya Finance overdue loans and coverage
25% 5.0% 0.9% 1200%

0.8% 1035%
4.5% 0.8%
0.7% 1000%
20% 19.3% 4.0%
18.6% 0.7% 0.6% 0.6%
18.0% 17.9% 18.0% 0.6%
3.5% 0.6% 734% 800%
15.6% 719%
0.5%
15% 3.0% 0.5%
518% 516% 600%
2.5% 0.4%
419%
10% 2.0% 0.3% 400%
1.5%
0.2%
200%
5% 1.0%
0.1%
0.5%
0.0% 0%
0% 0.0% 2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022
Overdue loans provisioning coverage (RHS)
Cost to income ratio (LHS) Cost of credit (RHS) Overdue loans as % of total loans (LHS)
SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS SOURCES: CGS-CIMB RESEARCH, COMPANY REPORTS
19
Autos │ Indonesia
Figure 42: Federal International Finance CIR and CoC ratios Figure 43: Federal International Finance overdue loans and
coverage
35.0% 9.0% 1.8% 700%

1.5% 598%
29.3% 8.0% 1.6% 587%
30.0% 28.9% 564% 600%
26.8% 1.3%
25.7% 26.0% 7.0% 1.4%
485% 483%
24.2% 468% 1.1% 500%
25.0% 1.1%
1.2% 1.0% 1.1%
6.0%
1.0% 400%
20.0% 5.0%
0.8% 300%
15.0% 4.0%
0.6%
3.0% 200%
10.0% 0.4%
2.0% 100%
0.2%
5.0%
1.0%
0.0% 0%
0.0% 0.0% 2018 2019 2020 2021 2022 1Q23
2018 2019 2020 2021 2022 1Q23
Overdue loans provisioning coverage (RHS)
Cost to income ratio (LHS) Cost of credit (RHS) Overdue loans as % of total loans (LHS)
United Tractors: diversification from coal will take

time, but is progressing
After UNTR posted a record profit of Rp21.6tr in FY22, we expect its core net profit
to decline by a 14% CAGR in FY23-24F. Much of the decline, in our view, would
be driven by a decline in its coal mining business, on the back of an expected
Newcastle thermal coal price decline to US$211/163 per tonne in FY23F/FY24F
vs. FY22F average of US$353/tonne. Thermal coal price is currently at a
depressed level of US$130-140/tonne due to global concerns over growth;
however, we expect some recovery for the rest of 2023F as we enter EU
restocking seasons and El Nino potentially lifting coal demand in some affected
countries.
Doing a sensitivity analysis for a pessimistic coal price scenario will present less
than 3% revisions to our net profit for Astra. Assuming thermal coal price will not
recover from the current price for the rest of 2023F, FY23F average coal price
average will be around US$185 per tonne instead of US$211, based on our
estimates. This would reduce our heavy equipment revenue and operating profit
forecasts by around 7%, resulting in the abovementioned 3% downside.
Still, the 7% reduction in revenue/operating profit forecasts is much more resilient
than those for other Indonesian coal mining companies, as UNTR’s businesses
are more diversified. Although heavily influenced by the coal sector, UNTR’s main
Komatsu heavy equipment and Pama mining contracting businesses do not only
cater to coal miners, but also metal mining and/or construction sectors.
UNTR is also progressing in terms of diversifying revenues away from coal-related
sectors, even though becoming a mainly non-coal-related business might take
years to accomplish, in our view. We note the series of both completed and
planned acquisitions by UNTR announced in FY22-23F as boding well for UNTR’s
target of reducing its coal-related revenue to 50% by FY30F (vs. our calculations
of coal revenue making up c.80% as of FY22). These include a) a US$12m
investment in a hydropower company Arkora Hydro; b) plan to acquire c.90%
stake in Stargate Pasific Resources (nickel mining company) and Stargate Mineral
Asia (nickel smelter licence holder) for US$272m; and c) plan to acquire c.20% in
Nickel Industries Ltd (NIC AU) for US$636m.
This, however, would result in a short-term reduction in UNTR’s cash level and its
ability to pay dividends in the next two years, a trade-off that we think is worthwhile
given the uncertain long-term outlook of the coal mining sector. We should expect
a more modest dividend payout after the surprise FY22 dividend disbursement
where the company paid out US$1.5bn or c.121% of its FY22 net profit. UNTR is
20
Autos │ Indonesia
still planning for FY23F capex of US$1bn. Its announced plan to acquire a stake
in Nickel industries would also cost US$0.6bn. When looking at 2023F FCF of
US$1.4bn and the already modest Dec 22 cash level by historical standards of
US$2.5bn, we should expect a return to normalcy in terms of dividend payment
from UNTR, which partially explains our forecast that ASTRA’s high FY22
dividend per share may also moderate.
Astra Agro Lestari (AALI): moderating from a high

base
AALI contributed 7% of Astra’s revenue in FY22, a number that we expect to be
relatively stable in the future. As CPO prices moderated from post the immediate
commodity uplift following the Russia-Ukraine conflict, we forecast AALI’s core net
income to decline by 26% yoy in FY23F to Rp1.3tr before rebounding by 20% to
Rp1.5tr in FY24F. The FY23F yoy earnings decline will be driven by: a) a 13% yoy
ASP decline to Rp10.4k/kg due to softer CPO prices, and b) still elevated cash
cost due to rise in fertiliser prices. These two factors would offset the positive
effects of 2023’s CPO sales recovery of 26% yoy to 1.4m tonnes, coming from
improving FFB nucleus productions, third party purchases and aggressive
inventory drawdown (which had been booked at relatively higher costs due to
higher FFB prices in FY22).
In FY24F, we expect the earnings recovery to be driven further by a slight CPO
sales recovery of 5% yoy to 1.2m tonnes and further easing of fertiliser prices
despite slightly softer ASP assumptions of Rp10.3k/kg (-1% yoy). We note an
upside risk to our FY23/24F CPO price assumptions of RM3,800/3,500 per tonne
should El Nino phenomenon lead to a long dry season in 2H23F, though this may
come at the expense of declining CPO production in FY24F. The prolonged dry
season has historically led to tree stress and eventually a decline in CPO
production in the following year. The reduced supply presents an upside risk to
CPO prices. This was apparent during the strong 2014-16 El Nino phenomenon,
whereby Indonesian CPO production declined by 3% yoy in 2016 to 34.5m tonnes.
CPO production in Malaysia, on the other hand, declined by 13% yoy to 17.3m
tonnes in 2016. However, this has led to a higher average CPO price of
RM2,657/tonne in 2016 vs. 2015’s average of US$2,190/tonne, and overall, El
Nino may be positive for earnings.
We must also note the risk of government export intervention should CPO prices
increase significantly due to El Nino, as the government seeks to contain inflation.
This is a relatively new risk that could reduce AALI’s exports portion due to the
government’s domestic market obligation, which was instituted temporarily during
the FY22 spike in cooking oil prices. AALI derived 34% of its CPO volume in 1Q23
from the export market.
Figure 44: CPO price trend
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Jan-2020
Jan-2021
Jan-2023
Jan-2018
Jan-2019
Jan-2022
May-2019
May-2020
May-2022
May-2023
May-2018
Mar-2019
Mar-2020
May-2021
Mar-2022
Mar-2018
Mar-2021
Mar-2023
Jul-2019
Jul-2020
Jul-2018
Jul-2021
Jul-2022
Nov-2018
Nov-2019
Nov-2022
Nov-2020
Nov-2021
Sep-2018
Sep-2021
Sep-2022
Sep-2019
Sep-2020
CPO FOB spot price, RM/tonne

SOURCES: BLOOMBERG, CGS-CIMB RESEARCH, COMPANY REPORTS
21
Autos │ Indonesia
FINANCIALS
Declining net profit in FY23-24F, before a rebound in FY25F
We forecast a 5% yoy core net profit decline in FY23F, followed by a 4% decline
in FY24F, before 4% growth in FY25F. The decline in net profit growth is mainly
caused by the heavy equipment and mining business which is moderating from a
high mining base in 2023F. We expect this to ease in FY25F as heavy equipment
and mining revenue contribution should reach 33% by FY24F, which is down from
FY22’s 41% and is slightly lower than the 35% attained in FY19 (before the
pandemic).
Most of the near-term growth will be contributed by the automotive business (car,
motorcycle, and automotive components), for which we estimate revenues to grow
at 7% CAGR from FY22-25F. We forecast the car-related revenue to grow at an
8% CAGR, motorcycle at 11%, and components at 4% CAGR. Because of
expanding margins due to economies of scale and a higher margin product mix,
we forecast total automotive business operating profit to grow at a 9% CAGR,
higher than the 7% revenue CAGR.
We forecast the operating profit of the financial service business, which mainly
comprises financing, to grow at 9% CAGR from FY22-25F, in line with the
automotive business’s 9%, as the majority of Astra financing business is related
to automotive. The heavy equipment and mining (UNTR), as well as agribusiness
(AALI), are forecast to grow at -11% and -5% CAGR, respectively, from FY22-25F
as profits moderate from the high base of the 2022 commodity boom, based on
our estimates.
Figure 45: Financial breakdown for automotive segment

AUTOMOTIVE (Rp bn, unless stated otherwise) 2021 2022 2023F 2024F 2025F
Revenues, net of elimination 95,729 121,056 133,109 139,975 148,028
growth 44% 26% 10% 5% 6%
Car dealerships 58,371 75,345 84,792 90,102 95,714
growth 59% 29% 13% 6% 6%
Motorcyle dealerships 23,349 24,110 28,937 29,954 31,778
growth 33% 3% 20% 4% 6%
Components 14,009 18,083 19,380 19,919 20,536
growth 14% 29% 7% 3% 3%
Gross profit 10,526 13,728 14,908 15,397 15,987
growth 41% 30% 9% 3% 4%
Gross margin 10.9% 11.3% 11.2% 11.0% 10.8%
Operating profit 611 2,531 3,467 3,366 3,264
growth -140% 314% 37% -3% -3%
Operating margin 0.6% 2.1% 2.6% 2.4% 2.2%
Income from associates

Revenues - Astra Daihatsu Motor (car manufacturing) 60,580 78,141 87,938 93,445 99,266
growth 62% 29% 13% 6% 6%
Net profit 2,592 3,981 3,605 3,831 4,070
Net profit margin 4.3% 5.1% 4.1% 4.1% 4.1%
Net profit - adjusted for Astra's ownership 819 1,269 1,149 1,221 1,297
growth 101% 55% -9% 6% 6%
Revenues - Astra Honda Motor (motorcycle manufacturing) 73,363 80,476 96,586 99,981 106,070
growth 35% 10% 20% 4% 6%
Net profit 6,350 6,555 7,867 8,144 8,640
Net profit margin 8.7% 8.1% 8.1% 8.1% 8.1%
Net profit - adjusted for Astra's ownership 3,149 3,303 3,934 4,072 4,320
growth 43% 5% 19% 4% 6%
Assumptions - car sales

National car sales, units 887,202 1,048,167 1,069,130 1,111,896 1,156,371
growth 67% 18% 2% 4% 4%
Astra car sales, units 488,245 574,000 609,404 622,662 636,004
growth 81% 18% 6% 2% 2%
Market share 55.0% 54.8% 57.0% 56.0% 55.0%
Astra car sales ASP, Rp m 120 131 139 145 150
growth -12% 10% 6% 4% 4%
Assumptions - motorcycle sales

National motorcycle sales, units 5,057,516 5,221,470 6,396,301 6,428,282 6,621,131
growth 38% 3% 23% 1% 3%
Astra motorcycle sales, units 3,929,000 4,000,000 4,989,115 5,014,060 5,164,482
growth 36% 2% 25% 0% 3%
Market share 77.7% 76.6% 78.0% 78.0% 78.0%
Astra motorcycle sales ASP, Rp m 5.9 6.0 5.8 6.0 6.2
growth -2% 1% -4% 3% 3%
22
Autos │ Indonesia
SOURCES: CGS-CIMB RESEARCH ESTIMATES, COMPANY REPORTS
Figure 46: Financial breakdown for financial services segment

FINANCIAL SERVICES (Rp bn, unless stated
otherwise) 2021 2022 2023F 2024F 2025F
Revenue 24,990 26,736 27,592 28,332 29,250
growth 23% 7% 3% 3% 3%
Astra Credit Companies 5,555 6,031 6,393 6,776 7,183
growth -3% 9% 6% 6% 6%
Federal International Finance 8,840 8,723 9,866 10,004 10,244
growth -8% -1% 13% 1% 2%
Asuransi Astra Buana 3,211 3,181 3,181 3,181 3,181
growth 1% -1% 0% 0% 0%
Others 7,383 8,801 8,152 8,371 8,642
growth 294% 19% -7% 3% 3%
Gross profit 13,250 14,544 15,038 15,441 15,941

growth 4% 10% 3% 3% 3%
Gross margin 53.0% 54.4% 54.5% 54.5% 54.5%
Operating profit 4,676 6,022 7,385 7,583 7,829

growth 68% 29% 23% 3% 3%
Figure 47: Financial breakdown for heavy equipment and mining segment
HEAVY EQUIPMENT & MINING (Rp bn) 2021 2022 2023F 2024F 2025F
Revenue 79,461 123,607 107,060 95,846 97,424
growth 32% 56% -13% -10% 2%
Gross profit 19,665 34,759 28,371 24,441 24,843
growth 51% 77% -18% -14% 2%
Gross margin 24.7% 28.1% 26.5% 25.5% 25.5%
growth 79% 96% -19% -15% 2%
Net profit 10,280 21,005 17,577 14,864 15,664
growth 71% 104% -16% -15% 5%
Assumptions
Komatsu HE sales (units) 3,088 5,753 4,880 4,460 4,460
Komatsu ASP, Rpbn/unit 226 248 210 210 210
Pama coal production, m tonne 116 116 122 126 132
Pama OB removal, m bcm 852 954 1,014 1,044 1,096
Pama all-in fee per ton of (coal+OB), Rpk/tonne 34 44 39 33 33
Thermal coal sales, m tonne 7 8 8 8 8
Coking coal sales, m tonne 2 2 2 3 3
Blended coal ASP, US$/tonne 1,524 3,131 2,699 2,199 1,946
Total gold sales (k ounces) 331 287 298 298 328
Implied Gold ASP ($/ounce) 1,756 1,797 1,593 1,585 1,578
Figure 48: Financial breakdown for agribusiness segment
AGRIBUSINESS (Rp bn, unless stated otherwise) 2021 2022 2023F 2024F 2025F
Revenue 24,322 21,829 20,533 21,239 20,891
growth 29% -10% -6% 3% -2%
Gross profit 4,830 3,823 3,219 3,581 3,369
growth 63% -21% -16% 11% -6%
Gross margin 19.9% 17.5% 15.7% 16.9% 16.1%
growth 86% -31% -22% 21% -8%
Net profit 1,971 1,727 1,276 1,538 1,494
growth 137% -12% -26% 21% -3%
23
Autos │ Indonesia
Figure 49: Financial breakdown for others segment

OTHERS (Rp bn, unless stated otherwise) 2021 2022 2023F 2024F 2025F
Revenue 11,095 11,931 12,528 13,154 13,812
growth 6% 8% 5% 5% 5%
Gross profit 3,278 3,591 3,771 3,959 4,157

growth 17% 10% 5% 5% 5%
Gross margin 29.5% 30.1% 30.1% 30.1% 30.1%

growth 41% 5% 9% 5% 5%
Figure 50: CGS-CIMB forecast vs. consensus

CGS CIMB Bloomberg consensus % difference
(in Rpm) 2023F 2024F 2025F 2023F 2024F 2025F 2023F 2024F 2025F
Revenue 296,932 294,470 305,166 307,238 315,660 327,838 -3% -7% -7%
Gross profit 64,854 62,182 63,635 67,801 68,148 71,095 -4% -9% -10%
EBIT 38,548 35,326 35,716 38,277 37,042 38,410 1% -5% -7%
EBITDA 52,438 50,503 52,225 52,019 50,350 51,360 1% 0% 2%
Pretax profit 49,646 46,587 48,351 49,656 49,506 51,056 0% -6% -5%
Net income 29,218 27,927 29,094 30,331 30,916 33,444 -4% -10% -13%
VALUATION AND RECOMMENDATION

Initiate coverage with an Add rating
We initiate coverage on Astra with an Add rating on its revitalised automotive
business, which is operating at a healthier margin and market share than in recent
years as it benefits from the more aggressive sales approach adopted by its main
car brand partners, Toyota and Daihatsu. Key car model launches in 2H23F and
strong reopening momentum from motorcycle sales support the positive near-
term prospects, in our view.
Astra is currently trading at an attractive 9.5x FY23F P/E, below its five-year
average of 11.5x 12M forward P/E. Our SOP-derived TP of Rp7,925 presents a
17% upside, implying 11.5x FY24F P/E, in line with the last 5-year mean, and
higher than Astra’s single digit P/E throughout most of the Covid-19 pandemic
years of 2020-22. We think a recovery closer to its pre-pandemic P/E in FY19 is
justified by one of the strongest automotive business positions in the last 10 years
and a declining contribution from Astra’s more cyclical commodity business. Risks
include increasing competition in the automotive space and worsening commodity
prices.
ASII is one of our Indonesian top picks, alongside BBRI, BMRI, BBCA, BFIN,
TOWR, MYOR, EXCL, BTPS, and CTRA. Our high conviction stocks are: BBRI
BMRI, and BFIN (vs. ASII, BBRI, and BFIN, previously).
24
Autos │ Indonesia
Figure 51: Astra’s historical forward P/E

(x)
23.0
21.0
19.0
17.0
15.0
13.0
11.0
9.0
7.0
5.0
3.0
Figure 52: Astra’s SOP valuation

NAV, adjusted for
ASII Gross NAV Holding ownership and Contribution
Business segments Valuation method
ownership (Rp bn) discount holding discount to total SOTP
(Rp bn)
Automotive business 100% Target P/E 11.7x (2024E), ASII's mean since 2018 133,758 - 133,758 42%
GGM-derived P/B target, 2.9x P/BV (2024E), 18% ROE, 8%
Financial service business 100% growth 89,582 - 89,582 28%
UNTR 60% Target P/E 6.5x - 1.3 s.d. below mean (2024E) 100,714 15% 50,936 16%
AALI 80% Target P/E 10x - 1.5 s.d. below mean (2024E) 15,398 15% 10,428 3%
Others 100% Equity investments value in reported balance sheet (Mar-23) 36,102 - 36,102 11%
SOTP 320,806
#shares, bn 40.5
NAV/share, (target price in Rp) 7,925
25
Autos │ Indonesia
Figure 53: Regional sector peers, automotive only

Target Recurring Dividend
Price Market Core P/E (x) 2-year EV/EBITDA (x) P/BV (x)
Bloomberg Price ROE (%) Yield (%)
Company Recom. Cap (US$ EPS
Ticker (local (local
m) CY23F CY24F CAGR (%) CY23F CY24F CY23F CY23F CY23F
curr) curr)
Astra International ASII IJ ADD 6,800 7,925 18,284 9.5 9.9 -5.9% 5.7 5.8 1.43 14.7% 4.2%
Tan Chong Motor Holdings TCM MK n.a. 1.05 n.a. 147 n.a. n.a. 23.7% 7.3 7.0 0.24 -1.3% 2.3%
UMW Holdings UMWH MK ADD 3.82 5.50 958 10.2 9.7 4.0% 8.3 7.0 1.03 9.9% 3.9%
Malaysian auto distributors 10.2 9.7 13.9% 7.8 7.0 0.63 4.3% 3.1%
NIO Inc 9866 HK ADD 78.20 100.5 16,876 na na na na na 5.14 -64.3% 0.0%
Li Auto Inc 2015 HK ADD 139.6 154.0 37,210 94.4 64.2 na 66.9 40.4 5.86 6.6% 0.0%
Xpeng Inc 9868 HK ADD 57.60 45.06 12,750 na na na na na 2.49 -21.9% 0.0%
BYD Co. 1211 HK ADD 262.4 342 103,912 32.6 24.2 35.3% 12.9 9.4 5.36 18.9% 0.5%
Tesla Inc TSLA US n.a. 277.0 n.a. 877,953 79.7 57.6 9.8% 49.7 35.6 16.38 23.0% 0.0%
Global EV manufacturers 68.9 48.6 22.6% 43.2 28.4 7.05 -7.5% 0.1%
Geely Automobile 175 HK n.a. 9.78 n.a. 12,575 16.6 11.9 17.8% 5.4 4.2 1.14 7.0% 2.2%
Great Wall Motor 2333 HK n.a. 9.41 n.a. 24,931 13.0 10.1 -11.4% 15.2 12.4 1.09 8.7% 3.2%
Guangzhou Auto 2238 HK n.a. 4.88 n.a. 13,255 5.4 5.0 -6.8% 49.1 14.8 0.40 7.4% 5.2%
KIA 000270 KS ADD 89,000 93,000 27,499 5.0 5.0 15.5% 1.0 0.9 0.92 17.3% 5.1%
Hyundai Motor Company 005380 KS ADD 206,500 270,000 33,570 4.9 4.7 26.6% 5.9 5.7 0.69 13.8% 4.8%
Toyota 7203 JP n.a. 2,327 n.a. 263,171 10.3 9.7 12.5% 11.6 11.1 1.04 10.7% 2.9%
BMW BMW GR n.a. 109.7 n.a. 78,462 6.6 6.8 -21.1% 3.4 3.5 0.79 12.8% 4.8%
Mercedez-Benz Group MBG GR n.a. 71.78 n.a. 83,551 5.7 5.7 0.8% 1.8 1.4 0.85 15.0% 7.2%
Volkswagen VOW GR n.a. 152.2 n.a. 76,025 4.7 4.7 0.0% 1.1 1.4 0.44 9.9% 6.2%
Ford F US n.a. 15.19 n.a. 60,772 8.4 9.2 -7.8% 3.1 3.1 1.34 15.9% 8.2%
General Motor GM US n.a. 39.09 n.a. 54,333 5.8 6.2 -5.8% 3.2 3.2 0.72 13.5% 1.4%
Global auto manufacturers 7.9 7.2 1.8% 9.2 5.6 0.86 12.0% 4.6%
CATL 300750 CH ADD 224.9 676.2 136,440 12.1 8.4 71.0% 4.9 2.9 2.83 21.1% 0.6%
EVE Energy 300014 CH ADD 58.19 116.7 16,431 17.8 12.6 78.2% 13.7 9.5 5.44 26.9% 0.6%
Gotion High-Tech 002074 CH n.a. 27.28 n.a. 6,696 38.9 24.7 102.9% 21.0 15.1 2.09 5.5% 0.1%
Shenzen Desay Battery 000049 CH n.a. 35.21 n.a. 1,455 11.4 9.1 10.1% n.a. n.a. 2.31 20.8% 2.5%
LG Energy Solution 373220 KS n.a. 565,000 n.a. 101,058 63.9 41.3 82.6% 25.8 17.0 6.24 10.5% 0.0%
SK On 096770 KS n.a. 165,900 n.a. 11,726 16.1 8.4 -14.6% 8.2 6.7 0.72 4.5% 2.0%
Samsung SDI 006400 KS ADD 703,000 840,000 37,151 24.3 19.8 11.8% 8.8 6.6 2.85 11.1% 0.1%
Battery manufacturers 26.3 17.8 48.9% 13.7 9.6 3.21 14.3% 0.8%
LK technology 558 HK n.a. 7.47 n.a. 1,315 13.7 10.7 27.1% 9.6 7.7 2.26 17.5% 2.4%
Times Electric 3898 HK n.a. 30.65 n.a. 7,450 13.6 11.6 15.9% 13.0 11.4 1.09 7.7% 1.9%
Ningbo Joyson Electronic 600699 CH n.a. 18.71 n.a. 3,532 28.8 19.6 59.5% 9.8 8.1 2.00 7.0% 1.1%
Continental A G CON GY n.a. 67.40 n.a. 14,667 8.9 7.2 35.3% 3.8 3.2 0.97 11.3% 3.2%
Valeo FR FP n.a. 19.31 n.a. 5,114 12.7 7.6 71.8% 3.5 2.9 1.14 9.6% 2.8%
Magna International MGA US n.a. 57.99 n.a. 16,592 11.7 9.1 22.2% 6.5 5.4 1.41 12.3% 3.2%
EV parts manufacturers 14.9 11.0 38.6% 7.7 6.4 1.48 10.9% 2.4%
DATA AS AT 07 JUN 2023

SOURCES: CGS-CIMB RESEARCH ESTIMATES, COMPANY DATA, BLOOMBERG
Note: Forecasts for Not Rated companies are based on Bloomberg consensus’ estimates
Why market flow factors favour Astra

From a funds flow perspective, we think Astra should benefit from the maxed-out
positions of local institutional funds in most major banks. A market rally could force
many local funds to trim positions in major banks, such as BBCA, BBRI, and BMRI,
because each holding may have hit the 10% cap. We have seen this with BBCA
over the years, and with BBRI in recent months.
Some of the excess funds are likely to be allocated to large cap alternatives with
a strong and stable business outlook, in our view. We think Astra fits these criteria;
moreover, most local funds are already heavy in their large cap consumer picks
and are reluctant to buy more commodity names due to the high volatility. We
think Astra is not yet saturated among domestic institutional funds, as highlighted
by its holdings by foreign and domestic funds, per KSEI data.
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Autos │ Indonesia
Figure 54: Domestic institutions overweight/underweight to JCI Figure 55: Foreign institutions overweight/underweight to MSCI
weight weight
5 40% 10 30%
5 9
4.0 20%
4 8 7.62 20%
4 0% 7
10%
3 6
-20%
3 5 0%
-40% 4
2
-10%
2 -49%-60% 3 -17%
1 2
-20%
-80%
1 1
0 -100% 0 -30%
ASII domestic insti holding (bn ohf shares) - LHS ASII foreign insti holding (bn ohf shares) - LHS
ASII domestic insti overweight (underweight) vs. JCI weight - RHS ASII foreign insti overweight (underweight) vs. MSCI weight - RHS
SOURCES: CGS-CIMB RESEARCH, KSEI SOURCES: CGS-CIMB RESEARCH, KSEI
Figure 56: Domestic institutional funds (insurance, pension, and Figure 57: Domestic mutual funds holdings of top 3-banks
mutual funds) holdings of top 3-banks
12.0 12.0
BBRI, 9.6
10.0 10.0
BBRI, 9.1
BBCA, 8.8
As % of portfolio
As% of portfolio
8.0 BBCA, 7.9 8.0

BMRI, 7.7
6.0 BMRI, 6.1 6.0
4.0 4.0
2.0 2.0
0.0 -
BBCA BBRI BMRI BBCA BBRI BMRI
SOURCES: CGS-CIMB RESEARCH, KSEI SOURCES: CGS-CIMB RESEARCH, KSEI
DOWNSIDE RISKS
 Competition in the 4W segment. As extensively discussed, the key risk to
the 4W automotive division, which usually contributes the largest portion of
Astra’s revenue, is competition. Although Astra’s key brands are the market
leaders in hybrid powertrain, a sharply rising EV penetration, as seen in some
markets globally, could reduce Astra’s car sales market share, in our view.
 Volatile automotive margin. From 2017-21, Astra had seen volatile margins
in the automotive segment, particularly towards year end. This may have been
partially explained by the fact that 2017-19 was a highly competitive period
and 2020-21 was the peak pandemic period. Margins have been much more
stable in 2022, when Astra’s models were highly competitive. Still, due to the
relatively thin operating margins of Astra’s dealership business, we believe
investors should take note of the volatility during more challenging periods.
 Domestic economic slowdown risk. Astra’s motorcycle and automotive
financing businesses are especially prone to domestic economic disruptions.
The majority of Astra’s motorcycle buyers are middle- and low-income
consumers, making them especially sensitive to an economic slowdown.
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Autos │ Indonesia
Likewise, the automotive financing business’ asset quality has also been
impacted by economic downturns.
 Commodity price risk, in relation to UNTR. UNTR still derives a large
portion of its revenue from the mining-related sectors. A global recession,
driven by aggressive central bank tightening, poses downside risks to metal
and coal prices, which in turn may reduce UNTR’s revenue. Other factors that
may affect coal prices include increasing China domestic coal production and
European gas prices.
 CPO price risk, in relation to Astra. Aside from global macroeconomic
factors, unforeseen adverse weather conditions are one of the key risks for
CPO price and production, which are both key for AALI’s revenue. While
uncommon, certain inflationary environments may prompt government
intervention in the form of export control, which may limit export revenues.
SWOT ANALYSIS
Strengths
- Astra has the highest market shares in both car and motorcycle sales, with
55% and 80% market shares as of May 23, respectively. This is cemented by
strong customer perception and an extensive network and aftersales service
of the Toyota and Daihatsu car brands, as well as the Honda motorcycle brand.
- The highest market share and extensive networks allow Astra to run a robust
automotive lending operation that caters to the dealership’s captive market.
- UNTR’s heavy equipment businesses have diversification that could ease the
effects of volatile metal and coal prices, as heavy equipment is not used only
for mining operations.
Opportunities
- Astra’s main car brand partners – Toyota and Daihatsu – could tap into their
industry-leading hybrid expertise to capture a higher market share in the mass
market segment.
- Astra has healthy cash generation that could help the company diversify its
business away from the already mature existing businesses and/or pay solid
dividends.
Weaknesses
- Astra’s 4W sales are partially dependent on product innovation by its key brand
partners, particularly Toyota and Daihatsu. Product competitiveness of Astra’s
partner brands has historically been volatile.
- While strong in plug-in hybrid EV, Astra’s main brand partners, Toyota and
Daihatsu, traditionally do not offer competitive or affordable battery EV cars.
- Astra’s major existing businesses are relatively mature. It has not been easy
to find significant enough diversification opportunities.
Threats
- The potential threat of Chinese carmakers bringing competitive EV models to
Indonesia.
- To push EV downstreaming, the government has been encouraging carmakers
such as Tesla and BYD to establish manufacturing plants in Indonesia. This
could intensify competition when they materialise.
- Although the mining sector had boomed since the beginning of 2022,
normalisation of commodity prices may slow the sector down and weigh on
UNTR’s growth.
COMPANY PROFILE
Historical Background
PT Astra International Tbk is an Indonesian conglomerate that was established in
Jakarta in 1957. Initially, it operated as a general trading company under the name
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Autos │ Indonesia
Astra International Inc. The company was founded by Tjia Kian Tie and Liem Pen
Hong. Jardine Matheson, a multinational conglomerate, has a controlling stake in
Astra, owning 50.11% of the company's shares. Astra went public on 4 Apr 1990,
by issuing 30m shares to the public.
Figure 58: Astra’s share ownership structure Figure 59: Astra’s share ownership structure
49.86% 50.11%
0.03%
Jardine Cycle & Carriage Ltd Board members Public/others below 5%
Figure 60: Historical timeline and milestone of Astra
Astra operates through seven core business divisions, which are: 1) automotive,
2) financial services, 3) heavy equipment, mining, construction and energy, 4)
agribusiness, 5) infrastructure and logistics, 6) information technology and 7)
property. Astra owns the largest car market share in Indonesia at 57% as of May
23, based on Gaikindo data, providing a wide range of vehicles, including
passenger and commercial vehicles, motorcycles and automotive spare parts.
The group also offers various financial services, such as consumer financing,
insurance, banking and leasing services. The company recently invested in the
energy sector, as part of its transition journey to be a more sustainable business
by 2030F and beyond, as guided in its Astra 2030 Sustainability Aspirations.
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Figure 61: Astra’s group structure as of 2022
Management Overview
Board of Commissioners:
 President Commissioner: Prijono Sugiarto
Mr. Prijono has been with Astra Group since 1990 and previously served as
the group’s President Director for 10 years. He is currently also Director of
Hongkong Land.
 Independent Commissioner: Sri Indrastuti Hadiputranto
Mrs. Sri has more than 34 years of experience in law firms and capital markets.
She currently also serves as Senior Advisor of Gajah Tunggal Group and
Morgan Stanley Asia Indonesia.
 Independent Commissioner: Bambang Permadi Soemantri
Mr. Bambang was Indonesia’s former Minister of Finance and Minister of
Research and Technology. He is currently also Commissioner of Telkom
Indonesia, Bukalapak, TBS Energi Utama and Indofood Sukses Makmur.
 Independent Commissioner: Apinont Suchewaboripont
Mr. Apinont previously held various executive positions in Toyota
Manufacturing Thailand. He is currently also Executive Vice President of
Toyota Daihatsu Engineering & Manufacturing and Director of Siam Toyota
Manufacturing.
 Commissioner: Anthony John Liddell Nightingale
Mr. Anthony has served as the company’s Commissioner for over 22 years.
He is currently also Director in several Jardine Matheson Holdings companies,
Shui On Land Limited, and Vitasoy International Holdings.
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 Commissioner: Benjamin William Keswick

Mr. Benjamin has served as the company’s Commissioner for over 15 years.
Previously he held several executive positions in Jardine Matheson Holdings
since 1998 and currently also serves as Chairman in several Jardine
Matheson Group companies.
 Commissioner: John Raymond Witt
Mr. John has served as the company’s Commissioner since 2016 and is
currently also Managing Director of Jardine Matheson Holdings, Jardine
Strategic and Hongkong Land.
 Commissioner: Stephen Patrick Gore
Mr. Patrick has more than 30 years of experience in various industries. He is
currently also serving as Director of Business Development of Jardine Cycle
& Carriage Ltd and Director of Siam City.
 Commissioner: Benjamin Herrenden Birks
Mr. Benjamin has served as the company’s Commissioner since 2020 and is
currently also Group Managing Director of Jardine Cycle & Carriage and
Commissioner of United Tractors.
Board of Directors:
 President Director: Djony Bunarto Tjondro
Mr. Djony has been with Astra Group since 1990 in various group businesses
in the automotive, mining and agricultural sectors. He is currently also serves
as the President Commissioner of Toyota-Astra Motor, United Tractors,
Pamapersada, Astra Honda Motor and Astra Digital International.
 Astra Motor 1 Director: Johannes Loman
Mr. Johannes has been with Astra Group since 1984 and previously served
as Marketing Director for Astra Daihatsu Motor and Astra Honda Motor. He is
currently also the EVP Director for Astra Honda Motor and Commissioner of
Astra Agro Lestari, FIF, Musashi Auto Parts Indonesia and Menara Astra.
 Astra Financial Director: Suparno Djasmin
Mr. Suparno has been with Astra Group since 1987 and previously served as
CEO of Isuzu, Daihatsu and Toyota sales operations. He is currently also
President Commissioner in several companies in the financial services sector.
 Astra Property Director: Chiew Sin Cheok
Mr. Chiew has more than 37 years of experience and has held positions in
Schroders, PwC, and Jardine Matheson. He currently also serves as
Commissioner for Astra Agro Lestari, Astra Otoparts, Pamapersada and
Daihatsu Motor.
 Astra Motor III and Logistic Director: Gidion Hasan
Mr. Gidion has been with Astra Group since 1999 and held previous position
as Corporate Finance Manager at Salim Group and President Director of
United Tractors. He currently also serves as President Director of Arya
Kharisma.
 Astra Motor II Director: Henry Tanoto
Mr. Henry has been with Astra Group since 1995. He currently also serves as
Vice President Director of Totota-Astra Motor.
 Astra Agribusiness, Infrastructure, and IT Director: Santosa
Mr. Santosa has been with the company since 1989 and held previous
executive positions in Astra Agro Lestari and Asuransi Astra Buana. He is
currently also President Director of Astra Agro Lestari.
 Astra Foundation Director: Gita Tiffani Boer
Mrs. Gita has been with Astra Group since 2011 and previously worked as a
Partner in Mochtar Karuwin & Komar law firm. She is currently also
Commissioner for Toyota-Astra Motor.
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 Astra HE, Mining and Construction & Energy Director: FXL Kesuma
Mr. Kesuma has been with Astra Group since 1992 and started his career in
Pamapersada Nusantara. He currently also acts as President Director of
United Tractors and Pamapersada Nusantara.
 Astra Motor III and IV Director: Hamdani Dzulkarnaen Salim
Mr. Hamdani has been with Astra Group since 1989 and previously held
positions as Vice President Director of Astra Otoparts and Director of Astra
Honda Motor. He is currently also President Director of Astra Otoparts.
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Refinitiv ESG Scores
B- A+ B- B- B B-
ESG Score ESG Controversies ESG Combined ESG Environment ESG Social Pillar ESG Government
ESG in a nutshell Score Score Pillar Score Score Pillar Score
Astra International scored a B- in its latest ESG Combined Score by Refinitiv. The company scored a B- for
Environmental and Governance, while scoring a B for its Social pillar. Astra derives its revenue mainly from: a)
automotive distribution (mainly Toyota and Daihatsu) which are the market leaders for hybrid vehicles, b) heavy
equipment, mining and energy segment (through UNTR), c) financial services, and d) agribusiness (through AALI).
Keep your eye on Implications

1. Astra stated in “Astra 20230 Sustainability Aspirations” 1. While we see transactions 2(b) and 2(c) draining UNTR’s
on its website that one its key initiative is to increase its cash position to the lowest level in the past 10 years, this
business resilience by growing non-coal revenues to should bode well eventually with UNTR’s ambition of
88% by FY30F (vs. 74% realised in FY22). As such, the reducing its coal-related revenues to 50% by 2030F (vs.
company commits to no new acquisitions of coal mines c.80% in FY22). A successful transition to reduce coal-
and no new investments in coal-fired power plants and related revenues may warrant higher valuations from the
will focus on diversifying into non-coal mineral mines and market and thus provide upside on Astra’s SOP
scaling up its renewable energy projects and valuation.
investments. 2. Reuters reported in Mar 23 that PepsiCo,
2. Astra’s ambition, as described in point #1, in our view, FrieslandCampina have asked their suppliers to stop
would depend on the progress of UNTR’s diversification sourcing palm oil from AALI, due to the ongoing
away from the thermal coal business and possible M&As controversy with NGOs. Reuters also reported in Oct 22
or green investments. In 2022-23, UNTR made: a) a that Nestle was planning to stop sourcing palm oil from
US$12m investment in a hydropower company Arkora AALI by the end of 2022. We note that these companies
Hydro; b) plans to acquire a c.90% stake in Stargate do not buy directly from AALI as it mostly sells its export
Pasific Resources (nickel mining company) and Stargate portion to traders. The company notes that exports to
Mineral Asia (nickel smelter license holder) for Europe in FY21 (during its peak export time) amounted
US$272m; and c) plans to acquire c.20% in Nickel to only c.2% of its export revenue, while most of its
Industries Ltd (NIC AU) for US$636m. exports are directed to the Asian market (i.e., China,
3. Controversy with NGOs, which have accused Astra Pakistan and Bangladesh). While we note that this may
subsidiary AALI of destroying the environment, not directly impact the company, it could signal further
committing human rights violations and land grabbing in pressure on its products in the export market.
Central and West Sulawesi. AALI has denied allegations
of land grabbing and human rights abuses and reiterated
its commitment to implementing its sustainability policy.
AALI believes those accusations are baseless and do
not reflect the real conditions on the ground.
ESG highlights Implications

1. Astra’s key carmaker partners, Toyota and Daihatsu, are 1. If UNTR is able to improve its Environmental score
at market leaders in hybrid vehicles, which contribute to going forward and maintains its current Social and
Indonesian efforts to reduce transportation sector Governance scores, we believe that the market will
emissions. assign higher multiples to UNTR.
2. Subsidiary UNTR has seen its resource use score and 2. AALI has been trading at premium valuations vs. other
rating trending lower over time, while its emission score Indonesian agri peers historically, given that it has the
remains low, though this has been offset by a positive largest export market exposure compared to its peers.
social score and improving governance score. However, we think ESG risks and lower-than-peers
3. AALI ranks 52nd on SPOTT with a score of 46.6%, production trend faced by AALI may continue to weigh
while being rated C in its overall ESG score by Refinitiv. on AALI’s valuation, and eventually weigh down Astra’s
SOP valuations.
Trends Implications
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Astra’s Refinitiv ESG combined score improved to a B- as We have not applied any additional premium/discount for
of FY22, from a C- in FY18. There were all-round ESG in our fundamental valuations. The company has
improvements, namely: a) Environmental pillar improved been deriving most of its revenue from commodity-related
from a D+ in FY18 to a B- in FY23, b) Social pillar improved subsidiary UNTR and AALI over the last two years;
from a C in FY18 to a B in FY23, and c) Governance pillar however, their proportions may fall as commodity prices
improved from a C in FY18 to a B- in FY23. normalise, making Astra a relatively more diversified
company, with significant revenue contributions from
automotive and financial services.
SOURCES: CGS-CIMB RESEARCH, REFINITIV
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BY THE NUMBERS
P/BV vs ROE 12-mth Fwd FD Core P/E vs FD Core EPS

2.60 19.0% 30.1 Growth 130%
2.40 17.4%
2.20 15.9% 25.1 90%
2.00 14.3%
20.1 50%
1.80 12.8%
1.60 11.2%
15.1 10%
1.40 9.7%
1.20 8.1% 10.1 -30%
1.00 6.6%
0.80 5.0% 5.1 -70%
Jan-19A Jan-20A Jan-21A Jan-22A Jan-23F Jan-24F Jan-19A Jan-20A Jan-21A Jan-22A Jan-23F Jan-24F
Rolling P/BV (x) (lhs) ROE (rhs) 12-mth Fwd Rolling FD Core P/E (x) (lhs)
FD Core EPS Growth (rhs)
Profit & Loss

(Rpb) Dec-21A Dec-22A Dec-23F Dec-24F Dec-25F
Total Net Revenues 233,485 301,379 296,932 294,470 305,166
Gross Profit 51,033 70,088 64,854 62,182 63,635
Operating EBITDA 37,828 54,795 52,438 50,503 52,225
Depreciation And Amortisation -12,295 -12,594 -13,891 -15,176 -16,509
Operating EBIT 25,533 42,201 38,548 35,326 35,716
Financial Income/(Expense) 265 428 393 221 936
Pretax Income/(Loss) from Assoc. 6,464 8,231 9,304 9,738 10,322
Non-Operating Income/(Expense) 88 -470 1,401 1,302 1,377
Profit Before Tax (pre-EI) 32,350 50,390 49,646 46,587 48,351
Exceptional Items
Pre-tax Profit 32,350 50,390 49,646 46,587 48,351
Taxation -6,764 -9,970 -10,504 -9,594 -9,902
Exceptional Income - post-tax
Profit After Tax 25,586 40,420 39,142 36,992 38,449
Minority Interests -5,390 -11,476 -9,924 -9,065 -9,355
Preferred Dividends
FX Gain/(Loss) - post tax
Other Adjustments - post-tax
Net Profit 20,196 28,944 29,218 27,927 29,094
Recurring Net Profit 21,288 30,840 29,055 27,927 29,094
Fully Diluted Recurring Net Profit 21,288 30,840 29,055 27,927 29,094
Cash Flow
EBITDA 37,828 54,795 52,438 50,503 52,225
Cash Flow from Invt. & Assoc. -5,390 -11,476 -9,924 -9,065 -9,355
Change In Working Capital 8,666 -14,030 -9,233 -9,434 -10,229
(Incr)/Decr in Total Provisions
Other Non-Cash (Income)/Expense
Other Operating Cashflow 2,660 5,278 10,705 11,039 11,698
Net Interest (Paid)/Received 265 428 393 221 936
Tax Paid -6,764 -9,970 -10,504 -9,594 -9,902
Cashflow From Operations 37,265 25,025 33,875 33,670 35,374
Capex -3,725 -14,358 -20,785 -20,613 -21,362
Disposals Of FAs/subsidiaries
Acq. Of Subsidiaries/investments
Other Investing Cashflow -6,377 -17,107 -4,663 -2,845 -3,427
Cash Flow From Investing -10,102 -31,465 -25,448 -23,458 -24,788
Debt Raised/(repaid) -11,214 4,064 -9,052 -10,000 -10,000
Proceeds From Issue Of Shares
Shares Repurchased
Dividends Paid -5,344 -11,416 -25,909 -11,687 -11,171
Preferred Dividends
Other Financing Cashflow 5,708 10,580 10,284 9,442 9,751
Cash Flow From Financing -10,850 3,228 -24,678 -12,245 -11,420
Total Cash Generated 16,313 -3,212 -16,251 -2,034 -834
Free Cashflow To Equity 15,949 -2,376 -625 211 585
Free Cashflow To Firm 29,451 -4,333 10,508 11,812 11,389
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Autos │ Indonesia
BY THE NUMBERS… cont’d
Balance Sheet
Total Cash And Equivalents 64,598 61,581 45,705 43,445 42,712
Total Debtors 26,303 35,001 34,485 34,353 35,651
Inventories 25,344 36,626 36,751 36,955 38,481
Total Other Current Assets 15,325 16,933 19,321 18,439 19,087
Total Current Assets 131,570 150,141 136,261 133,192 135,931
Fixed Assets 90,450 94,697 101,592 107,116 112,081
Total Investments 37,794 46,725 49,677 52,822 56,174
Intangible Assets 4,767 5,016 5,016 5,016 5,016
Total Other Non-Current Assets 102,730 116,718 119,025 121,550 124,193
Total Non-current Assets 235,741 263,156 275,310 286,504 297,464
Short-term Debt 3,812 5,643 5,643 5,643 5,643
Current Portion of Long-Term Debt 34,855 29,026 21,738 13,687 5,636
Total Creditors 25,149 37,644 37,772 37,982 39,550
Other Current Liabilities 39,962 46,885 47,244 46,900 48,768
Total Current Liabilities 103,778 119,198 112,397 104,212 99,597
Total Long-term Debt 33,819 36,052 27,000 17,000 7,000
Hybrid Debt - Debt Component
Total Other Non-Current Liabilities 9,166 8,972 9,331 9,709 10,105
Total Non-current Liabilities 42,985 45,024 36,331 26,709 17,105
Total Provisions 4,933 5,355 5,355 5,355 5,355
Total Liabilities 151,696 169,577 154,083 136,276 122,057
Shareholders' Equity 172,053 192,142 195,986 212,822 231,346
Minority Interests 43,562 51,578 61,502 70,598 79,991
Total Equity 215,615 243,720 257,488 283,420 311,337
Key Ratios
Dec-21A Dec-22A Dec-23F Dec-24F Dec-25F
Revenue Growth 33.4% 29.1% (1.5%) (0.8%) 3.6%
Operating EBITDA Growth 44.0% 44.9% (4.3%) (3.7%) 3.4%
Operating EBITDA Margin 16.2% 18.2% 17.7% 17.2% 17.1%
Net Cash Per Share (Rp) (194.9) (225.8) (223.6) 172.1 597.4
BVPS (Rp) 4,250 4,747 4,828 5,229 5,672
Gross Interest Cover 11.16 20.03 18.52 22.08 44.45
Effective Tax Rate 20.9% 19.8% 21.2% 20.6% 20.5%
Net Dividend Payout Ratio 42.3% 66.6% 29.4% 29.8% 29.8%
Accounts Receivables Days 37.70 37.12 42.71 42.68 41.65
Inventory Days 46.99 48.90 57.70 57.93 56.69
Accounts Payables Days 41.69 49.55 59.31 59.54 58.27
ROIC (%) 12.3% 21.1% 17.5% 15.3% 15.0%
ROCE (%) 9.8% 14.6% 12.9% 11.6% 11.4%
Return On Average Assets 9.1% 12.8% 11.9% 11.2% 11.2%
Key Drivers
Dec-21A Dec-22A Dec-23F Dec-24F Dec-25F
4W sales volume (ASII) 488,245.0 574,000.0 609,404.3 622,661.5 636,004.3
4W ASP, Rp m/unit 119.6 131.3 139.1 144.7 150.5
2W sales volume (ASII) 3,929,000.0 4,000,000.0 4,989,114.6 5,014,060.2 5,164,482.0
2W ASP, Rp m/unit 5.9 6.0 5.8 6.0 6.2
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Other jurisdictions: In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is only for distribution to professional,
institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
Distribution of stock ratings and inv estment banking clients for quarter ended on 31 March 2023
647 companies under cov erage for quarter ended on 31 March 2023
Rating Distribution (%) Inv estment Banking clients (%)
Add 64.6% 1.1%
Hold 27.0% 0.2%
Reduce 8.3% 0.2%
41
Autos │ Indonesia
Spitzer Chart for stock being researched (2-year data )

Astra International (ASII IJ)
Price Close
8,100 Recommendations & Target Price

8,500
7,600
7,100
6,600
6,100
5,600
5,100
4,600
Add Hold Reduce Not Rated
4,100
Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23
Recommendation Framework
Stock Ratings Definition:
Add The stock’s total return is expected to exceed 10% over the next 12 months.
Hold The stock’s total return is expected to be between 0% and positive 10% over the next 12 months.
Reduce The stock’s total return is expected to fall below 0% or more over the next 12 months.
The total expected return of a stock is defined as the sum of the: (i) percentage difference between the target price and the current price and (ii) the forward net
dividend yields of the stock. Stock price targets have an investment horizon of 12 months.
Sector Ratings Definition:
Overweight An Overweight rating means stocks in the sector have, on a market cap-weighted basis, a positive absolute recommendation.
Neutral A Neutral rating means stocks in the sector have, on a market cap-weighted basis, a neutral absolute recommendation.
Underweight An Underweight rating means stocks in the sector have, on a market cap-weighted basis, a negative absolute recommendation.
Country Ratings Definition:
Overweight An Overweight rating means investors should be positioned with an above-market weight in this country relative to benchmark.
Neutral A Neutral rating means investors should be positioned with a neutral weight in this country relative to benchmark.
Underweight An Underweight rating means investors should be positioned with a below-market weight in this country relative to benchmark.
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42

Astra International (ASII) - Initiation

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Company Note | Alpha series Autos │ Indonesia │ July 6, 2023

Financial Summary Dec-21A Dec-22A Dec-23F Dec-24F Dec-25F

Auto business profitability set for new high

120,000 1,200,000 20%

Last 12M wholesale sales Last 12M retail sales

SOURCES: CGS-CIMB RESEARCH, GAIKINDO SOURCES: CGS-CIMB RESEARCH, GAIKINDO

SOURCES: CGS-CIMB RESEARCH, GAIKINDO SOURCES: CGS-CIMB RESEARCH, GAIKINDO

Toyota and Daihatsu have turned more aggressive, benefitting Astra

We have become less concerned about the Hyundai threat

SOURCES: CGS-CIMB RESEARCH, GAIKINDO SOURCES: CGS-CIMB RESEARCH, GAIKINDO

Indonesia’s EV market outlook

4% Please fill in the values above to have them entered in you

3% Best selling EV and hybrid cars (4M23) Units

SOURCES: CGS-CIMB RESEARCH, GAIKINDO SOURCES: CGS-CIMB RESEARCH, GAIKINDO

Figure 12: Hyundai Ioniq 5 Figure 13: Wuling Air EV

The challenges may not be easily addressed

of Investment had indicated that Hyundai may be developing an affordable EV at

Figure 14: Country comparisons of battery EV (BEV) market

BEV Average price

Faster development of charging network is sorely needed for EVs to flourish

Subsidies are being rolled out to accelerate EV adoption, but less

Figure 15: Thailand – EV car sales by type and EV car penetration

Plug-in hybrid electric vehicle (PHEV) car sales, units

SOURCES: CGS-CIMB RESEARCH, IEA

1. Excise tax reduction from 8% to 2%.

Figure 16: Top 10 best-selling EVs in Thailand in 1Q23

Case study of China’s EV market: a blue-sky blueprint for EV adoption

China NEV penetration rate (to total passenger car sales)

SOURCES: CGS-CIMB RESEARCH, CAAM SOURCES: CGS-CIMB RESEARCH, CAAM

Figure 19: China’s NEV shipments and penetration

No. of NEV sales NEV penetration (%) - RHS

SOURCES: CGS-CIMB RESEARCH, CAAM

Figure 20: China’s NEV shipments and penetration rate to total PV

SOURCES: CGS-CIMB RESEARCH ESTIMATES, CAAM

The rising EV penetration in China is enabled by several factors, including

SOURCES: CGS-CIMB RESEARCH, CHINA STATE COUNCIL

- To encourage development of battery recycling industry and highlight the

SOURCES: CGS-CIMB RESEARCH, CHINA STATE COUNCIL

- 500,000 1,000,000 1,500,000 2,000,000 9%

Market share (%)

SOURCES: CGS-CIMB RESEARCH, CAAM SOURCES: CGS-CIMB RESEARCH, CAAM

Figure 25: BYD’s NEV portfolio as of 7 Jun 2023

QIN Plus DM-p/i

Mid size A-class Sedan

YUAN / YUAN PLUS

Mid Size A-Class SUV

Mid size B/C-class Sedan

Mid size B/C-class Sedan

SONG PLUS DM-p/i

Subcompact A0-class sedan

May-22 Premium MPV (BEV/PHEV) 3,110 620 / 166/230 / Dipilot 389,800-459,800

Luxury G-Class off-roading

SOURCES: CGS-CIMB RESEARCH, BYD

Conclusion regarding EV threat to incumbents in Indonesia: safe for now,

Indonesia, could reduce Indonesia’s attractiveness as an electric car

Figure 26: BYD Song Plus EV Figure 27: BYD Atto 3

SOURCES: CGS-CIMB RESEARCH, BYD, CARNEWSCHINA.COM SOURCES: CGS-CIMB RESEARCH, BYD

Motorcycle sales outlook

800,000 9,000,000 50%

National monthly 2W sales 12-months rolling 2W sales yoy growth

SOURCES: CGS-CIMB RESEARCH, GAIKINDO SOURCES: CGS-CIMB RESEARCH, GAIKINDO

800,000 1,800 2,500,000 90%

Total national motorcycle sales Astra motorcycle sales