Staying Ahead with Quality
Key Takeaways :
▪️AUTO posted revenues of IDR5.0tn or grew by 8.6% YoY during 1Q23, meeting our/consensus estimates at 24.3%/22.7%. Profit from JV stood at IDR240.6bn, or increased +41.3% YoY. Meanwhile, the net income was able to reach IDR432.9bn (+92.1% YoY) and met our/consensus estimates at 28.8%/29.5%.
▪️The 2W segment sales is expected to reach 5.6 – 5.8mn units in FY23E, higher than FY22 of 5.2mn. AHM (Astra) plans to release Honda Stylo 125cc and 160cc, which we evaluate will attract the public’s interest and in turn positively impact AUTO’s spare parts demand.
▪️AUTO recorded a net cash of IDR2.2tn and retained earnings of IDR8.5tn in 1Q23. We acknowledge that the ample cash and retained earnings provide bright expansions outlook.
▪️We recommend BUY for AUTO at a TP: IDR2,700, which implies PE/PBV 6.4x/0.7x on FY23E and 5.8x/0.6x in FY24F. Its stable financial position and strong brand positioning should be able to drive growth. Downside risks to our call include: 1) slower than expected in 4W and 2W sales; 2) higher interest rates, which may trigger lower vehicle sales; 3) higher raw material cost (due to the chip shortage and higher base metal prices).
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