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CORPORATE STRATEGIC - JAKARTA. The prospects of PT Astra International Tbk (ASII) are expected to be better in 2024. The automotive sector is expected to be the driver.
Throughout 2023, the Astra Group realized car sales of 560,717 units. This result is 2.35% lower year on year (YoY) compared to the previous year's sales of 574,198 units.
However, the CEO of Edvisor Profina Visindo Praska Putrantyo projects the potential growth of car sales in 2024 to improve compared to 2023. This is in line with the expectation of monetary easing amid an increasingly controlled inflation rate below 3%.
"In addition, the Indonesian consumer confidence index is still quite optimistic, which is 123.8 as of December 2023," he said to Kontan.co.id, Wednesday (17/1).
Kiwoom Securities analyst Miftahul Khaer also believes that economic growth in Indonesia is still the biggest factor in the growth of ASII's businesses in 2024. According to him, Astra has various business segments, making Astra quite close to economic growth and future government policies.
Another factor that can affect the company's performance is global conditions, including geopolitical situations that can impact commodity and energy prices. "Although most commodity prices have fallen again, we believe this will not have a significant impact," he said.
Miftahul mentioned, that one of the segments that contribute quite large from the revenue side of ASII is the sale of four-wheeled vehicles. According to him, with the potential growth of the middle class that is expected to continue, it will increase the demand for vehicles.
"Overall, we believe that with these sentiments, ASII's financial performance in 2024 can still grow at least 5%-8%," he said.
Associate Director of Pilarmas Investindo Securities Maximilianus Nicodemus added that competition in the automotive sector needs to be considered. "Currently, the competition is getting fiercer with Korean manufacturers providing more value to the community," he added.
However, Nico is optimistic that ASII shares are still prospective and recommends a buy with a target price of IDR 7,000. Miftahul also recommends buying ASII with a target price of IDR 7,004.
Meanwhile, Praska gives a neutral outlook for ASII by recommending a buy on weakness with a target price of IDR 5,925 per share.
"The mining and heavy equipment segment, which is dominated by commodities, contributes about 40%, so a significant price decrease affects ASII's financial performance, especially in terms of revenue and profit," he added.
