Analisa Saham | ASII | 24 Juli 2017
Mirae Asset Sekuritas Indonesia Initiation
(July 24, 2017)
*lAstra International (ASII IJ/Trading Buy/TP IDR9,200): Lining all engines to roar by Franky Rivan (franky@miraeasset.co.id)
- Correlating ASII’s 4W sales to the GDP, we found a strong correlation of 0.85. Using the regression method, we forecast ASII’s 4W sales would reach 615.6k and 637k units in 2017F and 2018F, respectively.
- Combining our forecast of the national 2W sales and our assumption of ASII’s resilient market share, we forecast the company would sell 4.65mn and 4.56mn of 2W units in 2017F and 2018F, respectively.
- We initiate coverage on ASII with a Trading Buy recommendation and a 12-month forward target price of IDR9,200, valued at our implied forward P/E ratio of 19.7x. We use the sum-of-the-parts (SOTP) method to derive our valuation on ASII.
- We believe our rich valuation on ASII is well-justified by the following arguments: 1) the outlook for the Indonesian 4W, 2W, and heavy equipment sales is bright, 2) ASII’s position as a market leader in the 4W, 2W, and heavy equipment markets is indisputable and irreplaceable, 3) ASII’s well-diversified business line would buffer the conglomerate against the systematic risk, and 4) its subsidiaries are performing well, and they would continue to push the parent entity’s profitability.
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