Astra International (ASII IJ)

GIIAS 2024 Visit KTA: Intensifying competition amid Chinese Producers Product Launches

• Our visit to GIIAS 2024 revealed aggressive Chinese 4W product launches with many choices in multiple price range.
• We observed decent traffic at the Toyota booth, with Innova Zenix and Hilux Rangga attracting the most interest.
• BYD’s new M6 MPV garnered attention, though we think it is still not comparable to Innova. Retain Buy rating and TP of Rp 5,100 on ASII.

GIIAS 2024: Chinese 4W products attracted significant interests

At GIIAS 2024 Auto Show, we observed notable releases such as BYD (M6 MPV), Hyundai (Kona EV), and Honda e-N1. Overall, we noted decent crowd interest in Toyota’s Innova Zenix and Hilux Rangga at the Toyota booth. Toyota also introduced a concept of its new EV car, FT-3e, though it did not indicate possible launch date. We noted more presence from the Chinese players (BYD, MG, Cherry, and the new entrant, Aion (GAC group)), which garnered decent attention. Price discounts are relatively decent at around ~Rp20mn for 2024 models across brands. Thus, we expect that several Chinese 4W players may gain further market share in the coming months.

BYD M6: may not be Innova’s direct competitor

BYD M6 is the most anticipated 4W EV for GIIAS 2024, with ~100 bookings in three days of GIIAS event. While it shares similar dimensions and is positioned in the same 7-seaters MPV class as Toyota’s Innova, we do not think it directly competes with Innova despite its relatively attractive price (Rp 380m-Rp 420m, similar to Toyota’s Yaris Cross but below that of Innova), as we believe it does not provide the comfort that Innova offers. Several early reviews stated that BYD M6 offers attractive value at its price, but not superior in any specific area, with relatively hard suspension that could be felt during speed bumps at low speed.

Reiterate Buy rating with TP Rp 5,100; competition may remain intensified

Overall, we see rising competition for ASII’s 4W to persist, especially from Chinese players. This could limit ASP increases on ASII in the future, hence limiting potential margin upside. We believe the hybrid segment, which currently amounted to 6% of total 4W industry sales in 1H24 (13% of ASII total sales), will remain an attractive niche for ASII, given less competition thus far. We expect better sales for ASII in 2H24, despite a possible slight downside due to absence of Avanza/Veloz Hybrid in GIIAS 2024. We reiterate our Buy rating on ASII with a TP of Rp 5,100. ASII is currently trades at P/E of 5.6x, -1.5 std dev of its 8 years mean. Downside risks to our view include: 1) Further aggressive entries from Chinese players; 2) Weaker purchasing power. 

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