ASII - Net profit drops 9% yoy in 1H24

ASII - Net profit drops 9% yoy in 1H24 Astra International (ASII) reported a 9.12% decline in net profit to IDR15.86 tn in the first semester of 2024. This figure is down from the achievement in the same period the previous year of IDR17.45 tn. The decline in ASII's net profit occurred as the company's revenue also fell 1.49% to IDR159.97 tn from IDR162.39 tn in the first half of 2023. ASII's profit decline was also exacerbated by unrealized losses on investments in GoTo Gojek Tokopedia (GOTO) and Medikaloka Hermina (HEAL) shares. The value of investment losses in the two companies reached IDR817 bn, a reversal from an initial profit of IDR 130 billion in the same period last year. (Source : CNBC Indonesia). Comment : ASII poor 1H24 earings was driven by its two main revenue drivers. Auto declined by 9% yoy, while UNTR drops 15% yoy on declining commodity price. Key to record better PATMI ‘24F growth are: (1) better 4W sales (2) stronger HEMCE volume and ASP as well as (3) Better fair value adjustments on investments in GoTo and Hermina. YTD, ASII shares drop by more than 20%. We believe at current price the stock is traded at an appealing level even assuming zero growth in 2024. We will revisit our model to accommodate below than expected results.