Jardine C&C

Jardine C&C: BOA-ML maintains Buy, with TP $59, set at 14% discount to NAV, the historical mean. Notes JCNC’s NAV is basically Astra’s valuation, since 95% of JCNC’s profits are from Astra, but likes JCNC as a cheaper entry.
Says Astra will a key proxy play on Indonesia’ auto multi-year growth story. Notes the barriers to entry for 4W (Four-wheel drive) are high in Indonesia, given that 50% of all passenger car sales are low-priced MPVs. Believes that Astra has an edge, with its 7-seater MPV (1.5cc) priced at US$15k that looks like a car, while most competitors’ pdts end up resembling vans.
BOA-ML expects Astra to continue to ride the J-curve growth in 4W over the next few years, with low price MPVs to account for ~60% of Astra’s passenger car sales. This will be underpinned by the potential addition of 1m households in Indonesia which earn upward of US$15k/yr in CY12E.