Automotive Sector - Inline 1H25, challenging 2H25

KBVS Update
Monday, 21 July 2025

Automotive – Inline 1H25, challenging 2H25
(Maintain Overweight)

* Automotive sector faces mixed signals in 1H25. While 4W sales volumes continue to compress, 2W exports show improved resilience. 1H25 car sales run-rate (46.2% vs. 47.4% FY25F) * aligns with historical averages. *2W sales are also on track, with a conservative ‘25F run-rate of 57.3% (vs. 59.5% prior), deemed achievable.

* Our ‘25F 4W sales forecast of -6.4% yoy remains challenging (vs. -14.0% in 24A), though our 2H25F of -12.2% YoY (vs. -8.8% in 2H24) sound makes it acceptable. Key 2H25 drivers include: (1) auto events (Jul-Nov), (2) faster interest rate cut transmission to auto loans, and (3) ongoing promotions.

* In the BEV segment, BYD holds the largest market share at 39.1%, with its premium sub-brand Denza in second place at 16.0%. Wuling and Chery are also in the top five, with 14.5% and 12.9% market share, respectively. Toyota dominates the HEV market, selling 16,081 units in 6M25, primarily due to the popularity of its *Kijang Innova Zenix. *

* Maintain Overweight on the sector and BUY for ASII, with a SOTP-based TP of IDR 5,850 (7.3x '25F P/E), while currently trading at 6.0x ‘25F P/E and considered attractive at below -1SD of 7.5x.

Regards,
Akhmad Nurcahyadi - KBVS Research team