ID - [Auto]: Still OVERWEIGHT; Major Brands Hike Up Prices
Analyst: Andrey Wijaya - RHB Sekuritas
Link to report: https://research.rhbtradesmart.com/attachments/99/rhb-report-ind_consumer-cyclical-auto_20181008_rhb-904386119953408805bba852b2d3d2.pdf
♦ Maintain sector OVERWEIGHT. Astra, the only stock we cover in this sector, is a BUY; our IDR9,200 TP is at the high end of the street.
♦ While price increases may dampen demand, we believe Indonesia’s vehicle sales growth is set to accelerate on improved consumer spending.
♦ TAM has announced that it will increase the prices of four models by 0.9-1.2%, due to rising production costs.
♦ ADM also raised the prices of some models by 0.6-2%, as it has to incorporate a catalytic convertor with specifications that comply with Euro-4 emissions standards.
♦ Mitsubishi and Wuling have already increased sales prices by 0.8-0.9% and 2%.
♦ In the meantime, Honda and Suzuki are maintaining their vehicle prices, as both are still calculating the impact of the weakened IDR on production costs.
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