Indonesia Sector Update 17 January 2020 Consumer Cyclical | Auto & Autoparts Indonesia Auto Neutral (Maintained) Stocks Covered 2 ASII’s Dec-19 Share Lowest In Last Six Months Ratings (Buy/Neutral/Sell): 1 / 1 / 0 Last 12m Earnings Neutral Revision Trend: Stay NEUTRAL. Dec 2019 4-wheeler (4W) national wholesales declined to Pecking Order Target Price 86.6k units (-4.6% MoM, -1.4% YoY), bringing FY19 wholesales to 1,026k Astra Otoparts (AUTO IJ) – BUY IDR2,100 units (-10.9% YoY). Astra International’s Dec 2019 market share declined to Astra International (ASII IJ) – NEUTRAL IDR6,700 47.4% (Nov 2019: 52.7%), the lowest in the past six months. Meanwhile, Mitsubishi and other small automotive brands’ market shares picked up. Key Analyst downside risk: Tougher competition in MPVs and SUVs. Key upside risk: Easier financing (from declining interest rates), which boosts auto sales. Andrey Wijaya +6221 5093 9846 Lower December 4W wholesales. FY19 4W domestic wholesales closed at
[email protected] 1,026k units (-10.9% YoY, 2018: 1,151k units). Although the decline in sales persisted throughout the year, the result notched above Gaikindo’s revised target of 1,000k units (initial target was at 1,150k units). Dec 2019 4W national wholesales declined to 87,534 units (-4.6% MoM, -1.4% YoY). ASII’s market share declined to 47.4%, the lowest in last six months. This softening was mostly attributed to Daihatsu, whose market share narrowed to ASII’s market share 12.5% in Dec 2019 (Nov 2019: 17.5%). Toyota, ASII’s biggest contributor to Astra's market share (LHS) sales, saw its market share drop to 31.7% in Dec 2019 (Nov 2019: 32.0%).