Credit Suisse: ASTRA INTERNATIONAL (ASII): Strong - Above 1Q10 car - motorcycle-reit Core Buy

· Arief Wana (Daily Attached): Indonesia’s March automotive data continued show a strong rebound. Car volumes almost doubled YoY to a new high of 65,523 units and motorcycle volumes jumped 40% YoY to 1.6 mn units. Thus, 1Q10 data was higher than our expectation. While we maintain our positive view on Astra International as a core holding for the Indonesian market, we put our earnings forecasts under review. Maintain OUTPERFORM.

· Astra’s market share for cars declined in March but stayed dominant at above 55% for 1Q10. The good news is that its motorcycle market share rebounded in March to a high of 48%, beating its biggest rival Yamaha for the first time this year. However, we believe it is too early to expect lesser competition. Astra’s earnings are more sensitive towards car market than they are for motorcycles. On sensitivity analysis, every 1% increase in car sales volumes (assuming financing stays the same) would impact Astra group’s net income by 0.3%. Every 1% increase in motorcycle volumes would impact Astra’s net profit by 0.1%.

UNTR EPS upgrade and Above expectation 1Q10 car (29% of 2010F) and motorcycle (26% of 2010F), we continue recommend Buy as Core Holding ASII due to its Diversified Consumer/Commodity earnings, Largest market cap in JCI (Bloomberg = JCI WGT), Strong Management & Balance sheet, and remains at relative valuation discount (currently 14.8x 2010F PER vs 15.1x 2010F CS Indonesia Universe which Target Index 17.5x 2010F)