CIMB Quick Takes – Astra International – Sweet July

Outperform and sum-of-the-parts target price of Rp55,200 maintained. July auto wholesales charted new highs, with preliminary data suggesting the sale of 699.3k and 72.4k motorcycles and cars respectively, +18% and +76% yoy, in 7M10. Low interest rates, plentiful credit and buoyant consumer confidence aside, July was boosted by a successful motor show and the high season leading to festivities in August/September. While the momentum remains strong, a more hawkish tone from the central bank following high July inflation may have repercussions on financing over the next few months. This is the main reason we are maintaining our forecasts, though we see upside to car sales (we deem motorcycle sales to be in line). We expect stock catalysts from strong retail sales and under-control inflation over the next two months.