Astra International, Rising competition in a growing market, Nomura

Astra’s best selling cars face
real competition for the first
time since their launch in 2004
Since their launch in Jan 2004, we think the best-selling Toyota
Avanza/Daihatsu Xenia have faced no real competition in their segment.
However, we expect this to change this year, with the launch of Suzuki
Ertiga and the upcoming launch of Nissan NV200/Evalia in June ‘12.
Rising competition in a growing market is a clear emerging theme, in our
view.

Astra Intl, The magnificent Honda, CLSA

Honda is not slowing down even after a victory over Yamaha last year. It
gained another 4% lead over Yamaha in 1Q12, supported by successful
launch of new model, with more to come. Impact from higher down
payments on financing and potential subsidized fuel price hike are risks to
earnings, but Astra is a much more diversified company now, with less
reliance on 2W market. With demand unleashes on the under-penetrated
4W market and UNTR business expansion unfolds, we expect mkt cap to
reach US$50bn by 2015. Maintain O-PF.

Astra International , Right place, wrong time, Macquarie

Event

·         We downgrade our recommendation to Neutral from Outperform; cut our FY12–13E estimates by 6.7%; and reduce our PT to Rp76k from Rp80k (representing a 15x FY13E PER). Our downgrade reflects several factors which collectively have made us sufficiently uncomfortable with the stock’s short term risk/reward profile to downgrade. We nevertheless remain positive on the long term story, and would look to re-accumulate in the low 60ks.

·         These factors include the likely material impact of BI down payment (DP) limitations on 2W volumes; the market share risk posed by Nissan’s upcoming NV200 launch; our existing expectations (now exacerbated) for ASII’s FY12E earnings growth to slow; and ASII’s relatively full short/medium term multiples.

Impact

·         20% down payment limitations looking increasingly likely:

Astra Intl, Regulatory pains, CLSA

Looming regulatory risks have caused market concern on Astra’s future
earnings despite a sterling FY11 result. Our worst case scenario points to
a 15% downside risk to its earnings due to these risks. However, our
best case scenario points to a 21% upside. We also believe Astra can
maintain its dominance; it is an incumbent play, but still an aggressive
one. Future upside to come if demand unleashes on auto and as UT’s
business expansion unfolds. O-PF, at 13.5x PE12 and 11.8x PE13.

Astra International, Sell into strength, Credit Suisse

● ASII’s 4Q11A earnings were up by 9% YoY, down 10% QoQ, with
FY11A net income up 24% YoY (3% ahead of consensus and 3%
below our expectations).
● ASII’s auto and agri divisions’ FY11A earnings came 2.8% and
6.8% below our expectations, supported largely by heavy
equipment (UNTR). ASII’s FY11A results provide further evidence
indicating that much of its performance has been attributed from
UNTR. Net net, we tweak up FY12E earnings forecasts by 1%
and FY13E earnings forecasts down by 1%.
● We see the risk of technical rebound as: (1) ASII’s share price has
dropped 7.2% YTD, 13.5% from YTD peak and underperformed
JCI by 8.1%YTD, (2) ASII is looking to do 1:10 stock split.
● We prefer to wait for potential further share price correction
particularly given potential fuel price hike, which we believe will
offer better entry points. We maintain our target price of
Rp65,890, based on SOTP, implying 14x 12E P/E.

Astra International (ASII.JK), No Surprises on 4Q Results, Citi

What stood out in the numbers? Pretty much in line — Astra’s full-year 2011 net
profit reached Rp17.8trn, up 24% YoY, 3% above ours and full-year consensus
respectively. 4Q11 net income reached Rp4.3trn, down 10% QoQ but up 8% YoY
mainly due to the Financial Service divisions and UNTR (down 17% and 14% QoQ)
coupled with the impact of the Thai floods that caused 4W volume to fall 10% QoQ.
Equity income from subsidiaries took a hit in 4Q (down 14% QoQ due to the Thai flood
impact) as contributions from Toyota Astra, Daihatsu and Isuzu declined by 18%, 15%
and 21% QoQ respectively (see figures 5-7 for a detailed breakdown).

Astra International, A new MPV rival is coming, Credit Suisse

● Suzuki Indonesia just launched Suzuki Ertiga on 10 February
2012, which we believe could be the new rival for Toyota Avanza
and Daihatsu Xenia (both owned by Astra), as it is targeting the
same market segment.
● Indonesia’s first-time car buyers are very brand cautious, and given
Toyota’s biggest market share in the country (34% market share),
we believe Astra will continue to lead the four-wheeler market.
● However, the entry of Suzuki represents additional competition in
Indonesia’s four-wheeler market, which may not be favourable for
Astra’s share price, particularly considering the high expectation
currently implied in Astra’s premium valuation.
● Astra’s auto division is currently valued at a demanding 62%
premium to the Indonesian market. We maintain our
UNDERPERFORM rating on Astra and target price of Rp65,890,
implying 13.9x FY12E P/E, in line with our index target marketimplied
P/E.