Astra International (ASII IJ)

3Q25 Preview: Potential Upside Surprise from Auto

• 3Q25 earnings may surprise on the upside, driven by +5.4% qoq volume growth and stable 52.0% mkt share, despite continued price pressure.
• A seasonal lift in 4Q25 should drive FY25 volume to ~750–770k units, keeping ASII’s share above 52.5% and earnings on track.
• Valuation remains undemanding at 7.5x FY26F P/E; TSR or HEV rollout could unlock upside to 9.5x (TP: Rp6,700).

Auto & FinSer: Potential upside surprise from volume

We initially expected 3Q25 net profit to remain soft at Rp7.9tr (-7% qoq, -21% yoy), but recent auto industry data suggest early signs of stabilization, and we think it may offer an upside surprise. The industry’s 4W wholesale volume rebounded +6.9% qoq to 184.7k units in 3Q25, with Astra’s volume rising +5.4% qoq to 96.1k units, keeping market share broadly stable at 52%. Meanwhile, we expect Financial Services (FinSer) earnings to remain steady, with revenue moving in tandem with auto sales volume and net margin at ~25–26% supported by stable credit quality during the quarter.

UNTR: Earnings to soften amid lower equipment sales and coal price

From UNTR, we expect 3Q25 earnings to reach ~Rp4.5tr (-7% qoq, -25% yoy), pressured by lower heavy equipment sales of 1.3k units (-16% yoy, -27% qoq), while we expect PAMA’s total mining volume (coal + OB) to recover to 343Mt (+9% qoq, -8% yoy), providing a partial offset.

Seasonal uplift expected in 4Q25F

We expect 4Q25 earnings for auto and FinSer business to benefit from typical year-end seasonality, as ~30% of Astra’s annual 4W sales are usually booked in the final quarter. This should lift FY25 volume toward 770-780k units, in line with our base case, maintaining ~52.5–53% market share. While pricing pressure from Chinese OEMs may persist, Astra’s brand leadership and robust after-sales network should support ASP and margin. On the UNTR side, 4Q25 is likely to be seasonally softer due to rainfall affecting overburden removal, partly offset by stable coal shipments and seasonally stronger coal price.

Still room for re-rating, but catalysts needed

ASII now trades at 7.5x FY26F P/E, below 5-year avg of 7.8x. Our TP of Rp6,700 implies 9.5x FY26F P/E, or close to +1SD, which we believe is justifiable if Astra can maintain >50% market share, deliver stable dividends (~7% yield), and provide more clarity on strategic catalysts such as TSR or HEV rollout. Without these triggers, we acknowledge the stock may remain rangebound. However, risk reward remains skewed to the upside, with any surprise execution potentially lifting valuation multiples closer to historical mean.

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