FROM EQUITY RESEARCH DESK

IDEA OF THE DAY

PT Victoria Care Indonesia: Adapting to shifts in consumers behavior (NOT RATED) VICI reported a 6.7% yoy revenue increase in 1H24, driven by hair care growth despite a 2.3% decline in personal care due to competition. The mgmt. plans to shift partial promotional costs to offline stores due to changing consumer behavior, while keeping A&P costs at 18% of rev. Management maintains FY24 guidance for 11% EPS growth, with revenue growth of 12-15%, a GPM of 55% and NIM of 13%. To see the full version of this report, please click here   To see the full version of this snapshoot, please click here   MARKET NEWS

RESEARCH COMMENTARY

4W & 2W data for Aug24

• Aug24/8M24 4W wholesale: 76.3k/560.5k (-14%/-17% yoy). Aug24 vs Jul24 improved by 3% mom
• Aug24/8M24 4W retail sales: 76.8k/584.8k (-11%/-12% yoy). Aug24 vs Jul24 improved by 2% mom
• Aug24/8M24 2W sales: 573.8k/4.3mn (+7%/+3% yoy). Aug24 vs Jul24 declined by 4% mom

 

Comment: we continue to see improvement in 4W sales, with 4W wholesales remainig in-lne with our projection, while 2W recorded its first monthly sales decline since Lebaran. On 4W dealer inventory, we see a slight build up of inventory, although it remains relatively small. Regarding 4W discounts, we found that only Wuling offered slightly higher discount in Aug24 compared to Jul24, while we observed a normalization of discounts on Toyota and Mitsubishi post-GIIAS.

 

Honda, Mitsubishi, BYD, and Wuling show better monthly sales in Aug24 (albeit Honda still recorded weak yoy trend), while ASII’s market share seems to drop to 54.8% in Aug24 vs 59.6% in Jul24 (avg 57% for YTD-24). Overall, we are still optimistic about the 4W recovery trajectory and expect a monthly blip in ASII’s market share is just part of the market share normalization. We have a BUY rating on ASII with a TP of Rp5,700. (Richard Jerry, CFA & Christian Sitorus - BRIDS)

 

MIDI SSSG at +12.01% yoy in Aug24

• MIDI reported SSSG at +12.01% yoy in Aug24 (2Q24: 9.6% yoy), marked 4 consecutive months since May24, contributed by MIDI Stores in outer Java Island (>50% of total store).
• In 8M24, MIDI opened 111 Alfamidi stores(Jul-Aug: 36 stores).
• The mgmt remains optimistic to achieve 3Q24 SSSG at +11% yoy and on track to open an additional 200 Alfamidi stores in FY24. (Natalia Sutanto & Sabela Nur Amalina - BRIDS)

 

MACROECONOMY

China's Exports Accelerated to 8.7% yoy in Aug24

China's exports accelerated to 8.7% yoy in Aug24, against the expected deceleration of 6.5% from July's 7%. Imports, on the other hand, slowed to 0.5% yoy from 7.2% in Jul24. The export volume has been rising faster than the value in recent months, indicating Chinese companies were cutting prices to secure sales. (Bloomberg)

 

Indonesia Retail Sales Surpass Estimates in July at 4.5% yoy

Bank Indonesia reported slightly better-than-estimated Retail Sales in Jul24. The figure got revised up to 4.5% from 4.3% in early estimation. Food, Beverage, & Tobacco sales surged to 6.5% yoy from 3.5% in Jun24. In Aug24, Retail sales were estimated to grow by 5.8% yoy and 1.6% mom. Price expectations for the next three months from Jul24 rose to a three-month high. (Bank Indonesia)

 

SECTOR

Government to End Sales of Gasoline Cars, Offers Rp30mn Discount on Electric Vehicles

The government plans to stop selling conventional gasoline cars to boost electric vehicle adoption. Discounts on electric cars are making them more affordable. The policy, which is a part of Indonesia's automotive roadmap, aims to phase out new ICE cars by 2045, even though most new vehicles in the country still use fossil fuels. (Kontan)Bottom of Form

 

State Finance Accountability Committee Proposes a 2.5% Excise on Sweetened Beverages in 2025

State Finance Accountability Committee (BAKN) suggests a 2.5% excise rate for Packaged Sweetened Beverages (MBDK) in 2025 and plans to gradually increase it to a maximum of 20%. BAKN stated that the suggestion is part of DPR's recommendations that the government must consider. (CNBC Indonesia)

 

Iran-Israel Conflict Could Push Up Oil Prices, Subsidies Might Balloon to Rp600tr

An open war between Iran and Israel would impact oil prices, potentially causing Indonesia's energy subsidies to balloon to Rp600tr. Komaidi Notonegoro, Executive Director of the Reforminer Institute, said that tensions in the Middle East, with an open war between Iran and Israel, could drive up oil prices by up to US$60. This is because Iran controls the Strait of Hormuz, which plays a crucial role in trade. The Strait of Hormuz affects 40%-50% of global oil trade. (Kontan)

 

Telco: Several Operators Gradually Switching to eSIM

Several cellular operators are gradually starting to switch to using digital SIM cards, although the government has not yet issued regulations on embedded Subscriber Identity Modules or eSIMs. As of early Aug24, according to EXCL, it has acquired over 460,000 eSIM users. eSIM users include both existing customers who previously used physical cards and new customers interested in using eSIMs directly. Meanwhile, FREN has reported a 40% growth in the number of eSIM users over the first six months of 2024. (Bisnis)

 

CORPORATE

AKRA: Arthakencana Acquires 32.09mn Shares for Rp46bn

Arthakencana Rayatama expanded its holdings in AKRA by purchasing 32.09mn shares through three transactions on September 4, 5, and 6, 2024. The acquisitions, made at prices between Rp1,422-Rp1,437 per share, totaled Rp46bn. Following these transactions, Arthakencana's stake in AKRA rose to 12.65bn shares, representing 63.05% ownership, up from 62.89% previously. (Emiten News)

 

MCAS Partners with Tencent Cloud to Boost AI Technology in Indonesia

MCAS is collaborating with Tencent Cloud to implement AI solutions aimed at enhancing efficiency and innovation across sectors in Indonesia. Their latest project focuses on palm verification technology for secure and efficient biometric verification, with plans to introduce more advanced solutions to the market. (Emiten News)