In today’s briefing:
- Astra International (ASII IJ) – Rewarding Investors for an Extraordinary Year
- Arwana Citramulia (ARNA IJ) – Capacity-Driven Future
Astra International (ASII IJ) – Rewarding Investors for an Extraordinary Year
- Astra International’s results reflected its exposure to commodities, especially coal, through heavy equipment and mining through United Tractors (UNTR IJ) but most divisions booked growth as the economy recovered.
- The company’s core auto and financing business made much more than half of its profits and also contributed to its growth with a slower performance from agri-business and construction.
- Astra International (ASII IJ) announced a generous 85%-dividend payout to reward investors for its coal exposure in 2022, implying a 10% dividend yield. Valuations remain significantly below historical averages.
Arwana Citramulia (ARNA IJ) – Capacity-Driven Future
- Arwana Citramulia released a solid set of numbers for FY2022 but we expect growth to continue for the next two years driven by new capacity in higher margin products.
- The company’s new capacity will be focused on expanding its porcelain tile business but it will also expand its higher-margin DigI UNO ceramic product, which will be positive for margins.
- Arwana Citramulia (ARNA IJ) remains a top-quality and high-growth industrial choice in Indonesia. Valuations are attractive with a single-digit PER and high teens EOS growth for the next two years.
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