RHB Indonesia - Auto: Stronger vehicles wholesales - 12 January 2017 - (Auto) Unknown Kamis, 12 Januari 2017




Good morning,

Auto: Stronger vehicles wholesales


i) Relaxation LTV threshold policy
ii) Lower financing costs
iii) Better consumer spending, boosted by higher commodity prices, such as CPO and coa


In our calculation, on quarterly basis, both 4W and 2W saw an improvement in sales, reached 270,000 units (+7.3% QoQ) and 1,579,000 units (+13.7% QoQ), respectively. Higher cars sales were mainly underpinned by low-cost-green cars, especially low-MPV model which just launched in 2H16. While, sign of recovery on 2W sales has started in Sep-16.

Astra International President Director also shows its optimism on FY17 vehicles sales, expecting two stage of demand situation with demand is likely to remain stagnant in 1H17, before accelerating in 2H17 with an expected growth of 5%-10%.

The recent increase in vehicle administrative cost should mute impact to overall demand, in our view. As a way to increase non tax revenue, the government, among others, has decided to increase the fee on the vehicle administration, especially after seven years of no adjustments.

For 2W:
To obtain or extend an STNK (vehicle registration certificate) : new fee is Rp 100,000, a 100 percent increase from the previous Rp 50,000, while for BPKB (vehicle ownership document) now costs Rp 225,000, from Rp 80,000 previously
For 4W:
The fee for STNK issuance and extensions for cars has increased from Rp 75,000 to Rp 200,000 while to obtaining or extending BPKB now costs Rp 375,000, up from Rp 100,000.

Although the percent increase in the cost is high, but from it is from a small base.

We maintain Overweight on Indonesia Auto sector with Astra International (ASII IJ, BUY, TP9,250, 13% upside) as our top pick. (Andrey Wijaya)
Link to Daily report: Indonesia Morning Cuppa - 120117

Media Highlights:

Corporates

ACES’ Dec-16 SSSG accelerated, led by growth in ex-Java
¨ ACES’ December SSSG accelerated to 3.9% (from 0.9% in Nov) driven by strong sales in ex-Java which jumped to 6.8% in Dec from just 0.5% in Nov; it seems higher commodities price helped.
¨ The result is encouraging, showed an sales acceleration across the board in Indonesia.
¨ FY16 top-line reached Rp4.87tn, 96% of consensus.
¨ Basically same takeaway with RALS’ SSSG figures.
¨ ACES trades at 19.5x 2017cons PE (Stifanus Sulistyo)
Figure: ACES’ SSSG Summary
Source: Company

Wika Beton eyes IDR330bn net profits
Wijaya Karya Beton (WTON IJ, BUY, TP: IDR1,070) eyes net profits of IDR330bn in 2017, up 17.8% compared to estimated realisation in 2016 of IDR280bn. According to its Finance Director, the company targets revenue to reach IDR5trn in 2017, up 42% compared to estimated realisation in 2016 of IDR3.5trn. Moreover, financial performance in 2017 will be supported by new contracts which are targeted to reach IDR6.3trn. (Bisnis Indonesia)

Comment: Management target it is in-line with our NPAT FY17F of 328bn, mainly supported by strong orderbook from HST, toll roads, railway and other infrastructure projects. (Dony Gunawan)

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Best regards,

Helmy Kristanto
Director
Head of Indonesia Research
PT. RHB Securities Indonesia
DID: (6221) 2970 7056
Fax: (6221) 2783 0777

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