Astra International (ASII IJ)

Transcription

1 Equity Research Results Note Thursday,28 February 2019 BUY Maintain Last price (IDR) 7,600 Target Price (IDR) 9,500 Upside/Downside +25.0% Previous Target Price (IDR) 9,500 Stock Statistics Sector Bloomberg Ticker Automotive ASII IJ No of Shrs (mn) 40,484 Mkt. Cap (IDRbn/USDmn) 307,675/21,930 Avg. daily T/O (IDRbn/USDmn) 269.4/19.2 Major shareholders (%) Jardine Cycle & Carriage 50.1 Estimated free float 49.9 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa Consensus Danareksa/Cons (1.3) (0.8) 0.3 ASII relative to JCI Index Astra International (ASII IJ) Solid earnings in 2018 although weak in 4Q18 Astra International (ASII) reported net profits of IDR4.6tn in 4Q18 (-31.2% qoq, -1.9% yoy). Cumulatively, the net profits are up 15.0% yoy at IDR21.7tn in The result is inline with our full year estimate (99%) and the consensus (95%). Despite the persistently tight competition in the car market, we expect ASII s 4W market share to be stable at around 50% going forward. Maintain BUY with a target price of IDR9,500 based on SOTP valuation. 4Q18: Soft earnings from automotive and the heavy equipment division. Quarterly net profit declined by 31.2% qoq due to lower earnings from: a) the automotive division (-46.2% qoq) on the back of a significant increase in the operating expenses under this business despite solid ASII car sales volume (+1.1% qoq), b) the heavy equipment division (-44.0% qoq) as well as c) infrastructure and logistics and agribusiness. Better earnings from financial services (+4.0% yoy) helped to cushion against a further decline in net profits. But solid earnings in 2018 from heavy equipment and financial services. In 2018, net profits jumped by 15.0% yoy mostly thanks to strong earnings from a) the heavy equipment division (+48.4% yoy) supported by solid coal prices which resulted in higher earnings from coal-related business, and b) financial services (+28.3% yoy) with better earnings from the consumer finance, banking and general insurance businesses. However, despite solid car and motorcycle sales, the automotive division reported 3.9% yoy lower net profits as a result of a lower automotive margin of 0.5% in 2018 (2017: 0.7%). Stiff competition in the domestic car market persists. We expect competition in the domestic car market in the LMPV segment to remain fierce following the recent launch of Nissan Livina, which is based on Expander. Nonetheless, we expect ASII to maintain its market share in the domestic car market at around 50% in In 1M19, ASII s market share was 52%. Maintain BUY with a target price of IDR9,500 (based on SOTP valuation). We believe the company can maintain its market share above 50% on higher sales of the new facelift Avanza and Xenia and its Rush and Terios models. The stock is currently trading at -1SD. The main downside risks are: a) further rupiah weakness, b) higher domestic interest rates which might dampen domestic car sales growth and c) the risk of stiffer competition following the launch of the new Nissan Livina, which is based on Expander s platform. Our TP implies 15.9x 2019F PE. Source : Bloomberg x Stefanus Darmagiri (62-21) stefanus.darmagiri@danareksa.com Key Financials Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Revenue (IDRbn) 181, , , , ,174 EBITDA (IDRbn) 24,219 27,371 33,265 37,103 40,916 EBITDA Growth (%) (1.1) Net profit (IDRbn) 15,156 18,881 21,971 24,166 26,373 EPS (IDR) EPS growth (%) BVPS (IDR) 2, , , , ,042.3 DPS (IDR) PER (x) PBV (x) Dividend yield (%) EV/EBITDA (x) Source : ASII, Danareksa Estimates See important disclosure at the back of this report 1

2 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth Exhibit 3. Margins Exhibit 4. Gearing Level See important disclosure at the back of this report 2

3 Exhibit RESULTS WITHIN EXPECTATION Profit & Loss, IDRbn (in IDRbn) 4Q17 3Q18 4Q18 QoQ, % YoY, % YoY, % FY2018 A/F, % Revenue 55,832 62,327 64, , , , Gross profit 11,695 13,446 14, ,368 50, , Operating income 5,461 7,737 6,666 (13.8) ,326 26, , EBITDA 7,216 9,758 8,819 (9.6) ,837 34, , Other income (expenses) 1, (611) (208.9) (155.7) 2,117 1,091 (48.5) 2, Equity income 1,100 2,253 1,755 (22.1) ,694 7, , Net income 4,688 6,689 4,600 (31.2) (1.9) 18,847 21, , Margins, % Gross margin Operating margin EBITDA margin Net margin Revenue Breakdown, IDRbn (in IDRbn) 4Q17 3Q18 4Q18 QoQ, % YoY, % YoY, % FY2018 A/F, % Automotive 24,903 28,263 27,748 (1.8) , , , Financial services 4,755 4,874 4, ,768 19, , Agribusiness 4,813 4,741 5, ,306 19, , Information Technology 1,892 1,002 1, (26.2) 3,918 4, , Heavy equipment 18,301 22,181 23, ,559 84, , Infrastructure and logistic 1,800 1,912 2, ,628 7,419 (2.7) 6, Property % Automotive Financial services Agribusiness Information Technology Heavy equipment Infrastructure and logistic Property Net Income, IDRbn (in IDRbn) 4Q17 3Q18 4Q18 QoQ, % YoY, % YoY, % Automotive 2,289 2,798 1,505 (46.2) (34.3) 8,868 8,518 (3.9) Financial services 804 1,310 1, ,752 4, Agribusiness (7.7) (47.0) 1,568 1,146 (26.9) Information Technology Heavy equipment 1,069 2,146 1,202 (44.0) ,469 6, Infrastructure and logistic (165) (22.2) (150.9) (231) 196 n/a Property (25.4) (28.3) % Automotive Financial services Agribusiness Information Technology Heavy equipment Infrastructure and logistic (3.5) (1.2) 0.9 Property See important disclosure at the back of this report 3

4 Exhibit 6. Income Statement Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Revenue 181, , , , ,174 COGS (144,652) (163,689) (172,859) (185,766) (195,563) Gross profit 36,432 42,368 47,893 53,420 58,612 EBITDA 24,219 27,371 33,265 37,103 40,916 Oper. profit 17,534 20,326 25,463 28,677 31,783 Interest income 1,699 1,982 1,765 1,420 1,606 Interest expense (1,745) (2,042) (1,601) (1,690) (1,732) Forex Gain/(Loss) (155) (9) (17) Income From Assoc. Co s 3,349 6,694 6,896 7,417 7,453 Other Income (Expenses) 1,571 2,245 2,245 2,245 2,245 Pre-tax profit 22,253 29,196 34,752 38,441 41,922 Income tax (3,951) (6,031) (6,950) (7,688) (8,384) Minority interest (3,146) (4,284) (5,830) (6,587) (7,165) Net profit 15,156 18,881 21,971 24,166 26,373 Core Net Profit 15,311 18,890 21,988 23,793 25,807 Exhibit 7. Balance Sheet Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Cash & cash equivalent 29,357 31,574 25,394 28,737 34,252 Receivables 56,126 61,472 60,267 65,191 69,468 Inventory 17,771 19,504 17,856 19,189 20,202 Other Curr. Asset 6,250 8,438 5,376 5,825 6,190 Fixed assets - Net 66,695 76,488 82,702 87,965 93,674 Other non-curr.asset 84,757 97, , , ,869 Total asset 261, , , , ,959 ST Debt 45,820 43,584 35,063 34,482 33,999 Payables 30,085 39,281 32,651 35,089 36,940 Other Curr. Liabilities 13,174 15,857 15,857 15,857 15,857 Long Term Debt 25,090 31,394 25,844 26,906 27,864 Other LT. Liabilities 7,780 9,201 9,201 9,201 9,201 Total Liabilities 121, , , , ,860 Shareholder'sFunds 111, , , , ,646 Minority interests 27,955 32,684 38,701 45,288 52,453 Total Equity & Liabilities 261, , , , ,959 See important disclosure at the back of this report 4

5 Exhibit 8. Cash Flow Year to 31 Dec (IDRbn) 2016A 2017A 2018F 2019F 2020F Net income 15,156 18,881 21,971 24,166 26,373 Depreciation and Amort. 3,889 5,610 7,802 8,427 9,133 Change in Working Capital 232 3,206 (715) (4,269) (3,803) OtherOper. Cash Flow (1,076) (5,552) 721 (2,179) (2,109) Operating Cash Flow 18,201 22,145 29,779 26,145 29,594 Capex (8,546) (15,403) (14,016) (13,690) (14,841) Others Inv. Cash Flow (3,700) (5,514) (2,847) (3,505) (3,062) Investing Cash Flow (12,246) (20,917) (16,864) (17,195) (17,903) Net change in debt 261 4,068 (14,071) New Capital Dividend payment (6,801) (6,801) (9,441) (10,986) (12,083) Other Fin. Cash Flow 2,840 3,722 4,417 4,897 5,432 Financing Cash Flow (3,700) 989 (19,095) (5,608) (6,176) Net Change in Cash 2,255 2,217 (6,180) 3,343 5,515 Cash - begin of the year 27,102 29,357 31,574 25,394 28,737 Cash - end of the year 29,357 31,574 25,394 28,737 34,252 Exhibit 9. Key Ratios Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Growth (%) Sales (1.7) EBITDA (1.1) Operating profit Net profit Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) Interest Coverage (x) Source : ASII, Danareksa Estimates See important disclosure at the back of this report 5

6 See important disclosure at the back of this report 6