Jakarta. Astra International (ASII), a prominent conglomerate, saw its shares plummet by 4.12 percent to Rp 4,890 ($0.3) by the close of the initial trading session on April 19. The stock briefly hit Rp 4,870, marking its lowest point in the past year.

Astra, a key player in Indonesia's automotive sector, witnessed a 24 percent year-on-year decline in March car sales, totaling 40,438 units and capturing a 54 percent market share.

Meanwhile, nationwide wholesale car sales for March 2024 surged by 6 percent compared to the previous month.

According to analysts from Indo Premier Sekuritas, Giovanni Dustin, and Ryan Dimitry, the rise in national wholesale car sales was driven by seasonal demand surrounding the Eid al-Fitr holiday. However, sales contracted by 26 percent year-on-year (yoy).

"Astra's sales volume hit 40,000 units on March 24, accounting for 22 percent of our 2024 projection – generally in line," noted Giovanni and Ryan in their research.

They further observed that Astra raised discounts in April 2024, from an average of Rp 19.2 million in March 2024 to Rp 21.9 million in April 2024, marking a 13 percent month-on-month increase.

The Low-Cost Green Car (LCGC) and Low Sport Utility Vehicle (LSUV) segments experienced the most substantial surge in discounts at 30 percent.

Additionally, Giovanni and Ryan highlighted the entry of Chinese 4W manufacturer, GAC Aion, into the Indonesian market, partnering with Indomobil Group (IMAS) for distribution. GAC Aion, established in 2017 and a subsidiary of the GAC Group, sold 480,000 units globally in 2023. They plan to unveil two battery electric vehicles (BEV) in June 2024, including the Y Plus and Hyper HT, both MPV and crossover SUV models.

"More BEV models are set to launch in the coming months, such as the BYD Denza D9 in May 2024 (a luxury MPV likely to compete directly with the Toyota Alphard), Vinfast VF6/7 on July 24 (SUV), and Neta U and S on September 24 (SUV/sedan)," explained Giovanni and Ryan.

While most concerns are likely priced into ASII's current valuation at a 7x P/E ratio, Giovanni and Ryan anticipate limited short-term positive catalysts for ASII.

Indo Premier reiterated a hold recommendation for ASII shares with a target price of Rp 5,800/share.

Astra intends to propose a dividend payout amounting to Rp 21 trillion ($1.3 billion), representing 62 percent of the company’s net profit in 2023.

Astra International CEO, Djony Bunarto Tjondro, announced that the dividend payment amounts to Rp 519 per share and will be presented during the annual shareholders’ meeting scheduled for April 30.