Avanza’s strong resale value and after-sale service are being overlooked...– We would like to re-emphasize that the key strengths of Toyota Avanza (no.1 best selling car in Indonesia for more than a decade) are its strong resale value and after-sale service.
For instance, the resale value of Avanza after 5 years is still 60-70% as compared to c.50% for its known comparable peers.
Avanza also benefits from Toyota’s largest and unrivalled service network in Indonesia (>3x the size of Mitsubishi’s), against which newcomers like Wuling will likely struggle to compete.
Enhanced buying opportunity on Astra; Reiterate BUY at IDR10,000 TP – We believe that the recent share price weakness on Astra (ASII IJ, IDR7,925) provides a good buying opportunity.
We have a BUY call with a 12-month IDR10,000 TP (based on SOTP), translating to a 26% upside potential.
A near-term catalyst would be the potential rate cut at the Aug-17 Central Bank meeting.
Downside risks:
1) Macro downturn,
2) Market-share erosion from new models launched by competitors,
This note marks a transfer of coverage.
ASII BUY TP 10.000
by Bahana (DX)
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