Indocement Tunggal Prakarsa (INTP IJ)

May24 sales volume: solid industry and INTP sales

• Industry/INTP recorded 11%/21% yoy vol growth in May24, causing the 5M24 sales vol to expand by 3%/10% yoy.
• INTP bulk sales grew further in May24 (+50% yoy) vs bagged (+9%-11% yoy), bringing some risk to ASP despite recent bagged price increases.
• We think the coming 1-2 months data will be crucial for the 2024 outlook. Reiterate Buy rating on INTP with a TP of Rp 8,400.

5M24 4W sales remain weak, while 2W sales are starting to trend down

4W wholesales in May24 reached 71.2k (+47% mom/-13% yoy), driving 5M24 sales to reach 334.9k (-21% yoy, 39%/30% of our/Gaikindo est., hence inline with our target but a miss to Gaikindo’s, as the 5M sales are historically 39% of the total FY figure in the past 3 years). Meanwhile, 4W retail sales reached 361.6k in 5M24 (-14% yoy). The rolling 3M car retail sales data indicates little or no overstock at dealers, as retail sales continue to be higher than wholesales (see Figure 3), a trend evident since Jan24. We also observe that dealer discounts in May24 were less aggressive (~7% discount of the OTR price) compared to Apr24 (~8%). On brands, Wuling performed the best in 5M24 (-7% yoy) due to the release of the Binguo EV, followed by Mitsubishi (-11%) and Daihatsu (-13%). On the 2W front, May24 sales reached 505k units (-4% yoy/ 21% mom), with 5M24 sales of 2.6m (-2% yoy, 44% of our target, hence inline), translating to a second straight month of lower sales.

ASII 4W market share gained momentum in May24

Toyota, Daihatsu, and Isuzu sales in May24 improved by 54% mom/-12% yoy, outpacing the industry growth (+47% mom/-13% yoy), thus implying ASII gained market share in May24 (on a mom basis) to 58% (vs. average market share in Jan-Apr24 at 56%, inline with the FY23 average). We think this higher market share may not be sustained, however, given stiff competition from new Chinese brands (e.g., BYD, Chery) in 2024 onwards. Nonetheless, we expect ASII’s market share to only decline slightly to 55% in FY24F, as we expect ICE and hybrid models to maintain their dominance (~90% to total sales).

Maintain Hold rating with a TP of Rp5,100; new models are needed to aid sales

We believe the May24 data (strong mom, yet still weak on a yoy basis) is widely expected. We expect better industry sales in 2H24F due to BYD delivery (expected to begin by mid Jun24) and more new model releases (possibly Toyota and several new Chinese brands in GIIAS Jul24), as historically, sales in 2H24 are 53% of total FY sales. We reiterate our Hold rating on ASII with a SOTP-based TP of Rp5,100. ASII currently trades at 5.7x P/E, -1.5 std dev of the 8-year mean. Upside risks include: 1) Recovery in purchasing power and 2) Lower auto loan rates. Downside risks include: 1) No significant new models in 2H24F and 2) Rapid price increases.

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