ASII - Astra car sales soar 54%yoy in May24

ASII - Astra car sales soar 54%yoy in May24 Sales of cars produced by Astra International (ASII) until May 2024 reached 41,314 units, or grew by 54% yoy compared to the previous month of 26,908 units. Astra's market share is around 58%. Toyota and Lexus contributed a lot to Astra car sales. In this period, total sales reached 23,897 units. Then followed Daihatsu with 14,983 units. Isuzu had total sales of 2,265 units and UD Trucks 169 units. In this period, Astra did not record sales for the Peugeot brand. Meanwhile, national car sales in May 2024 were 47% higher than the previous month. Head of Corporate Communications at Astra, Boy Kelana Soebroto, stated that he is optimistic that car sales in the future will continue to improve. (Source: Emiten News) Comment : We share the Astra optimism and believe that car demand will continue to increase. Amid the continuing high interest rate environment, we expect various promotions and consistent huge discounts to support overall car sales in the following months. Several automotive events, such as the 2024 Gaikindo Indonesia International Auto Show (GIIAS), which will be held next July, will play a crucial role, in our view. A lengthened credit period of up to 8 years will also provide more options to potential buyers and have a positive impact on Astra's car sales volume. Amid the continuing uncertainty, better purchasing power and stronger confidence will become other key catalysts. Our '24F 4W sales for the sector are around 1,056,990 units, with Astra products continuing to dominate the landscape market competition at 55.4% of market share. Maintain our OW in the auto sector and buy ASII with a SOTP-based TP of IDR7,350 (8.8x ‘24F PE).