ASII - Diversification strengthens earnings resilience despite weak 1Q26

KBVS Update
Tuesday, 19 May 2026

ASII - Diversification strengthens earnings resilience despite weak 1Q26 
(Maintain BUY; TP: IDR6,950)

* ASII began 1Q26 with earnings of IDR5.85 tn (-15.6% YoY), below both our and consensus estimates (18.0%/17.7%), mainly due to a sharp -79.1% YoY decline in HEMCE segment. Despite softer auto sales volumes, the auto division still delivered +4.2% YoY profit growth, supported by solid performance from Components & Mobility Services.

* More importantly, the results reinforce Astra’s improving earnings resilience and diversification. Financial services became the group’s largest earnings contributor, accounting for 38.8% of profits (Prev: 30.9% in 1Q25), driven by new financing growth to IDR32 tn. Meanwhile, the Agribusiness segment posted strong earnings growth of +34.8% YoY to IDR298 bn, supported by higher CPO sales volumes and stable prices.

* In our view, Astra is no longer merely a “Coal and Cars” story. The improving balanced net income contribution among Astra business arms (Financing, Infrastructure, and Agribusiness) provides stronger downside protection during cyclical sector pressure.

* We maintain our BUY call with an SOTP-based TP of IDR6,950 (8.6x ’26F P/E), implying attractive upside from the current valuation of 7.2x ’26F P/E, broadly in line with its historical mean of 7.1x.

Regards,
Akhmad Nurcahyadi - KBVS Research team