In today’s briefing:
- Astra Otoparts (AUTO IJ) – EVs, Modern Retail, and Medical Equipment
- Bank Rakyat Indonesia (BBRI IJ) – Ultra Attractive
Astra Otoparts (AUTO IJ) – EVs, Modern Retail, and Medical Equipment
- Astra Otoparts (AUTO IJ) looks set to see increasing contributions from its modern retail push, which will boost its trading business and should see margins improving over time.
- AUTO is pushing into both the EV component space and manufacturing public and residential EV charging equipment. It is also venturing into medical devices as local content becomes a requirement.
- AUTO has outperformed the auto market since the pandemic and looks set to continue to do so through new growth segments. Valuations attractive on 5.5x forward PER and 8% yield.
Bank Rakyat Indonesia (BBRI IJ) – Ultra Attractive
- Bank Rakyat Indonesia should have a stronger finish to the year with stable credit costs and continuing growth in micro recoveries driving fee income growth, with NIMs remaining stable
- Loan growth will increase in 4Q2024 but may see a slowdown in 2025 but the bank should see stable credit costs and a rebound in earnings with lower provisions.
- Foreign ownership and vaulations are back to 2015 lows apart from the pandemic at 2.1x PBV is also a 10-year ex-pandemic low of 1.8x, and trades on 9.6x PER.
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