Jakarta. Business conglomerate Astra International (ASII) reported a strong net profit of Rp 10 trillion ($636.2 million) for Q3 2024, marking a 21 percent year-on-year increase driven by solid operational performance across its segments, particularly in mining and financial services.

For the period from January to September 2024, Astra's total net profit reached Rp 25.9 trillion, reflecting a modest 1 percent growth year-on-year.

“This achievement surpassed expectations, accounting for about 84 percent of the annual consensus estimate,” Stockbit Sekuritas noted in its research report on Thursday.

The company’s net profit was further bolstered by foreign exchange gains and other income totaling Rp 1.7 trillion. Meanwhile, Astra's operating profit for the third quarter increased by 12 percent year-on-year, reaching Rp 10.9 trillion, while the operating profit for January to September totaled Rp 31.8 trillion, a decrease of 2 percent year-on-year.

“This positive operational performance was primarily driven by the mining, construction, and energy sectors under its subsidiary, United Tractors (UNTR), as well as the financial services segment,” explained Stockbit.

United Tractors reported a solid operating profit of Rp 7.1 trillion in Q3 2024, a 29 percent increase year-on-year and stable quarter-on-quarter. Thus, UNTR's operating profit for January to September stood at Rp 20.9 trillion, down 2 percent year-on-year.

“UNTR's performance remained solid despite lower coal prices this year. Among its sub-segments, mining contractors (Pamapersada), coal, and gold mining supported UNTR's performance amid declining heavy equipment sales,” Stockbit reported.

The financial services segment's operating profit grew by 5 percent year-on-year to Rp 2.2 trillion in Q3 2024, leading to a 10 percent year-on-year increase in operating profit from January to September, totaling Rp 6.6 trillion.

Astra's management noted that this segment's growth aligned with a 9 percent year-on-year increase in consumer financing, particularly for motorcycles. The robust performance in the motorcycle segment was reflected in Astra Honda Motor's (AHM) net profit, which grew by 17 percent year-on-year and 24 percent quarter-on-quarter to reach Rp 3 trillion in Q3 2024.

In contrast, the car segment reported weak performance due to sluggish sales volumes. Astra's car sales in September rose by 12.4 percent quarter-on-quarter but decreased by 12.1 percent year-on-year, while cumulative sales dropped 36.2 percent year-on-year. However, Astra managed to maintain a market share of 55 percent.

Given the better-than-expected performance, Stockbit anticipates that the consensus will raise its net profit estimates for ASII in 2024, particularly for UNTR.

Meanwhile, Mirae Asset Sekuritas Indonesia maintained an overweight rating for the automotive sector, despite the sales results for Q3 2024 and January to September being weaker than expected. Mirae anticipates better overall results in Q4 2024, given various automotive events and seasonal factors. Consequently, Mirae recommended buying ASII shares, setting a target price of Rp 6,050. As of this report, ASII shares were trading at Rp 5,125.