Astra International (ASII IJ)

FY24 earnings: in line with ours, beat vs. consensus

• ASII recorded net profit growth of 0.6% yoy to Rp34.05tr, forming 102%/106% of ours/cons (in line with ours, but above cons).
• Earnings were driven by 8% equity income growth (ADM & AHM), and growth in financial and agribusiness operating profit (+10%/+32% yoy).
• We reiterate our Buy rating with a TP of Rp5,900.

Earnings: in line with ours, higher than cons due to growth in financial, agri, and heavy equipment segments

ASII reported consolidated net profit of Rp34.05tr in FY24 (+0.6% yoy, 102%/106% of ours/cons, in line with ours but higher than consensus). FY24 earnings were driven by growth in equity income and strong financial segment, which were able to offset weaker operating profit in the auto segment. 4Q24 net profit reached Rp8.2tr (-18% qoq/+0.6% yoy). Consolidated revenue grew by 4.5% yoy to Rp330.9tr (100%/104% of ours/cons, or in-line) in FY24, which derived from by: 1) financial segment (+10% yoy), as ASII still enjoyed income from strong 4W/2W financing growth in FY23; 2) heavy equipment (+4.5% yoy), driven by higher-than-expected Komatsu sales; 3) agribusiness (+5% yoy) due to rising CPO prices. Decent auto segment revenue growth of +4% yoy despite weak 4W sales (-14% yoy), as it was offset by strong 2W sales volume. However, 4W/2W sales were peaking in 3Q24, with lower sales in 4Q24 vs 3Q24, thus dragging the consolidated revenue (-2% qoq, with auto 4Q24 revenue -3% qoq).

Weak auto margin was partially offset by higher financial margin, while equity income growth at a decent rate

Operating profit declined by 5% yoy in FY24 (4Q24: -4% qoq/-12% yoy), driven by a lower auto margin (1.2% in FY24 vs. 2.1% in FY23), with the 4Q24 margin at 1.0% (vs. 1.2% in 3Q24, in line with our previous estimation changes). We expect this to be due to lower high-end model sales in FY24 vs. FY23 (i.e., Innova sales declined by 4% yoy on a volume basis). Additionally, heavy equipment recorded higher opex in 4Q24, thus its operating profit declined by 8% yoy in FY24 (4Q24: -11% qoq). Nevertheless, consolidated operating profit was partially offset by a higher financial segment margin (FY24: +10% yoy, 4Q24: +4% qoq/+11% yoy), as it enjoyed a relatively low cost of financing. Equity income improved by 8% yoy in FY24, albeit slightly weakened in 4Q24 (-8% qoq) due to a seasonality factor. AHM recorded 16% net income growth in FY24 (4Q24: -29% qoq, due to lower 2W sales in 4Q24 vs. 3Q24), while ADM recorded 8% yoy net income growth (4Q24: +1% qoq).

Overall, earnings beat consensus est., yet in line with ours

We reiterate our Buy rating on ASII with an SOTP-based TP of Rp5,900. ASII currently trades at 5.6x forward PE, -1.5 std dev of its 5-year mean. ASII will conduct concall on Mon, 3th of March at 10am JKT time.

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