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Stock Index
Bahana Securities

26 Sep 2018 | 13:20 WIB
INDEX
SCORE
POIN
%
COMPOSITE
5.867,577
-14,643
-0,249%
Last 1 day
IDX30
506,315
-1,426
-0,281%
Last 1 day
MBX
1.652,827
-3,955
-0,239%
Last 1 day
DBX
973,853
-3,190
-0,326%
Last 1 day
KOMPAS100
1.191,793
-3,851
-0,322%
Last 1 day
BISNIS-27
512,230
-1,815
-0,353%
Last 1 day

Currencies
Bahana Securities

26 Sep 2018 | 13:20 WIB
KURS
BUY
SELL

April wholesale auto sales: Weaker

Based on sales figures (exhibits 1 and 2) released by Gaikindo (4W association) and AISI (2W association), April 2016 4W sales reached 84k units, +3.8% y-y but -9.9% m-m, resulting in 4M16 sales of 352k units, -3.3% y-y. For 2W, April sales reached 478k units, -8.9% y-y and -15.1% m-m, for 4M16 sales of 2mn units, -6.9% y-y.

In April, ASII's market share reached 55.9% (Mar-16: 49.1%; Apr-15: 56.9%) with monthly sales of 47.3k units, +2.0% y-y and +2.5% m-m, better than the industry trend. Nissan booked disappointing monthly sales of 0.4k units, -68% y-y and -82% m-m. Honda also booked weak monthly sales of 14.4k units, +36% y-y but  -30% m-m, as Honda tried to unload its sizeable inventory level.

Based on our channel checks, we are seeing mixed changes in discounts across the board in May compared to April. In May, the Toyota Avanza is being discounted by IDR19mn (9.1%), higher than the IDR17mn (8.4%) level in March. However, Daihatsu Xenia is being discounted lower at IDR17mn (9.5%), compared to IDR20mn (11.1%) in April. Honda has maintained its IDR15mn (7.4%) discount for Honda Mobilio. However, we expect the average 2016 discount level to hover around current levels, slightly lower compared to last year’s.

Honda’s April 2W sales (ASII) reached 349k units, -6% y-y and -21% m-m, reflecting a market share of 72.9% (Mar-16: 78.1%; Apr-15: 70.7%). Yamaha booked sales of 120k units, -14% y-y but +11% m-m, reflecting a market share of 25.1% (Mar-16: 19.2%; Apr-15: 26.7%). We believe that higher scooter demand positively affected Honda’s market share.

Despite some short-term bright spots, we expect the intense competition and resultant discounts to persist in the medium term, especially as several brands are due to be launched in 2017. Based on Bahana’s longer-term GDP growth expectation of 5.2%, we believe that the Indonesian auto sector will experience a CAGR of only 7% in 2016-20 compared to 15% y-y in the commodity boom years (2007-2013). 2W sales will likely grow just 3% y-y during that period. However, in 2016, we expect a gradual 4W sales volume recovery to 1.08mn units, +7% y-y, and flat 2W sales volumes of 6.4mn units.

Nevertheless, for ASII, we believe further de-rating will persist on continued heavy discounting and we therefore lower our SOPT-based 12M target price from IDR6,000 to IDR5,650. For IMAS, we reiterate our HOLD rating and DCF-based TP of IDR2,000 on continued weak prospects. On GJTL, we maintain our BUY rating with unchanged DCF-based TP of IDR860. Risks: higher margins (ASII), increased Datsun sales (IMAS), and a weaker IDR (GJTL).

The sector’s 23% outperformance earlier this year has been cut to zero ytd currently on the adverse impact of its dealership restructuring. While we maintain our Neutral sector rating as we expect autos to benefit from the expectation of higher GDP growth, interest rate cuts and a stronger IDR, weak commodity prices are likely to negatively affect purchasing power. 

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