ASII - 1Q25 earnings call; PATMI inline

ASII - 1Q25 earnings call; PATMI inline Yesterday, Astra International (ASII) held 1Q25 earnings call. Amid the continuing weakening buying power, steady consumer waits and see stance as well as prolonged uncertainty, revenue grew flat by 3% yoy with PATMI declining 7% yoy. Of the total business portfolio, HEMCE recorded the lowest performance with a sharp drop in PATMI by 30% yoy caused by declines in coal related business. Automotive as the main backbone growth noted 4% yoy lower on lower sales and weaker market. Financial services grew positive (3% yoy) on higher contribution from consumer finance on larger loan portfolios. (Source : Company) Comment : In all 1Q25 net income came in in-line with street expectation and our ‘25F PATMI for ASII at 20.8%/21.5% vs 23.8%. We expect a much better auto sales on seasonal effect in the upcoming month. We believe ASII will continue its focus on penetrating into Hybrid market segment while at the same time continue to maintain its domination in ICE segment. On HEMCE segment, we expect lesser heavy rain and hence could make positive impact to mining contracting business (1Q25 OB: 12% yoy). We also might witness a stable Komatsu sale, due to steady penetration from China machinery mainly has high competitiveness for construction related sector only. Lower financing yield with steady asset quality as well as manageable liquidity should overall support financial services segment to remain contributing positively to ASII’s total net income. Maintain our BUY stance for ASII with SOTP based TP of IDR 5,850 pegged at 7.3x ‘25F P/E, while currently trades at 6.1x or above -1SD of 5.3x.