Jardine C&C

Astra/ Jardine C&C: DB notes the strong motorcycle sales in Jun albeit the implementation of minimum down-payment on Syariah financing on 1 Apr. Demand is driven by the Muslim festive season (Lebaran) in early August coupled with strong underlying demand and availability of alternative financing. In total, the 2-wheeler sales reached 2m units (+11% y/y; 0% q/q) in 2Q13, and 3.9m units (+6% y/y) in 1H13. Hence, this implies monthly sales of 377k units needed in Jul-Dec to achieve its forecast of 6m units (-15% y/y) in 2013. Consequently, Astra Honda managed to grow its market share by 1ppt MoM (-2ppt y/y) to 59% in June 2013. Overall, Astra Honda managed to grow its sales by 11% YoY (-4% q/q) to 1.2m units in 2Q13, and 2.4m units (+12% y/y) in 1H13. DB expect the underlying demand (cheaper, safer & more convenient) for motorcycle sales to remain strong, and thus should provide some cover from the negative impact of potential fuel price hike. In summary, Astra Honda should continue to do well and maintain its dominance given its strong principal support, good product line-up, and healthy balance sheet. DB has a BUY rating on Astra with TP of IDR8900.