Danareksa Astra International (ASII IJ, Rp19,750 SELL) Still pricey

Gaining higher market share
We expect ASII to gain more share of the domestic car market in FY09 (55% compared to our previous estimate of 52%). As a result, our FY09 car sales estimate for ASII is boosted by 5% to Rp 31.8 tn. This upgrade reflects the strong demand for ASII’s brands given their better value for money and higher resale value. For motorcycles, however, we do not expect ASII to attain higher market share since Yamaha is putting up stiff competition. At the same time, we also maintain our industry sales estimates given that sales are broadly in line with our estimates. Note that 4M09 car sales are 29% of our full year estimate and 4M09 motorcycle sales are 32% of our full year estimate.

Tepid industry auto sales in 4M09
In 4M09, industry car sales are down 28% y-o-y (vs. our forecast of a 23% decline) while industry motorcycle sales fell 19% (vs. our forecast of an 18% fall). ASII’s car sales fared better, however - they dropped a less severe 18% while its motorcycle sales fell 17%. As a result, ASII boosted its share of the domestic car market to 57% in 4M09 from 50% in 4M08. ASII’s share of the motorcycle market was little changed (at 46%).

Maintain SELL with a new TP of Rp 17,345
Our updated sum-of-the-parts (SOTP) calculations yield a new net asset value (NAV) of Rp 70.2 tn or Rp 17,345 per share. Our TP implies PER09-10 of 9.9-8.0x and EV/EBITDA09-10 of 6.0-4.8x. We update our AALI TP to Rp 15,000 and UNTR TP to Rp 8,900 before deriving their equity values. Our share prices for AUTO, BNLI, and ASGR are as of 22 May 2009. The other calculations in the SOTP valuation are unchanged. We maintain our SELL recommendation as the stock is fully valued with 12% potential downside.