JPM ASII

Astra International. Slight flagging in demand and car loan rates cut in November. We did some channel checking to assess conditions in the 4 wheeler market, to gauge the near term outlook for Astra International. ASII has gone sideways over the last 2 months and trailed the index by almost 12% since mid-September. Our conclusion is that vehicle volumes are unlikely to challenge mid year peaks over the next few months. Our thesis of a quiet 4Q, followed by a surge in 1HFY11 vehicle sales remains untouched – we retain OW and June 2011, PE based PT of Rp 63,000.