Astra’s (ASII) Performance and Stock Prospects Amid the Rise of New Competitors

Jakarta – PT Astra International Tbk (ASII) shares this year are expected to face another challenge, which arises from the presence of new competitors in the Indonesian automotive industry from China, namely, Build Your Dreams (BYD) which will also build its factory in Indonesia following Hyundai and Wuling.

Head of Research Team and Strategist Mirae Asset Sekuritas, Robertus Hardy said that the challenge will also be triggered by car sales growth which is expected to remain stagnant and tend to decline this year.

“On the other hand, Astra’s valuation has been at its lowest since March 2020, so the covid has disappeared, the price is still covid, on the one hand, growth opportunities are still restrained from the potential for stagnant car sales to tend to decline this year,” Robertus said in his statement quoted on January 25, 2024.

Robertus added that the slowdown in car sales growth was also triggered by toll roads, whose acceleration is currently not in line with the growth of GDP per capita in Indonesia.

“If, for example, the road section increases along with the accelerated growth of income per capita, of course the potential for growth in the automotive market can be exponential, but for the time being the growth is still restrained so the growth in the industrial sector (cars) is also still restrained,” he added.

In addition, according to him, Astra’s performance will still be supported by motor vehicle sales which are considered still solid because they are able to record an increase in the midst of an era of high interest rates.

“The next year means that we emphasize that motorcycle consumers are still relatively resilient with the increase in interest rates even though and the elections. We also expect two rounds elections in June and November so mobility in our opinion will be more favorable for the motorcycle market compared to cars,” Robertus said.

Meanwhile, in terms of financial services, sales of the motorcycle sector are superior because they are able to hoist the level of interest income or premium income by Astra’s subsidiaries, namely PT Federal International Finance (FIF) and Astra Insurance, so as to compensate for potential car sales.

“It (motorcycle sales) will still increase with rowbus this year and can compensate for the potential decline in car and coal sales. Therefore, we think it is still quite appropriate to reaccumulate now considering that the valuation is also depressed,” he said.

For information, ASII’s stock movement this morning (25/1) at 09:50 WIB again showed weakness to the level of Rp5,050 per share, down 0.49 percent or equivalent to 25 points.

Even so, ASII shares moved at Rp5,025 as its lowest level and had touched its highest level at Rp5,100 per share, with 10.98 million billion shares traded, recorded three thousand times the frequency of changing hands, and the total transaction value reached Rp55.67 trillion. (*)

Editor: Rezkiana Nisaputra