Let The Rain Pour

Jakarta remains the primary revenue driver for BIRD (contributing ~85% for regular taxi & 100% for executive service), and with the city expected to face significant rainfall over the next three months, through Feb-25, we anticipate a positive impact on Bluebird operations. Increased rainfall typically shifts commuter preferences from motorcycles to cars, a trend that should support Bluebird performance. Notably, the financial outcomes for 4Q24 are projected to be consistent with those of 3Q24, which also saw high rain rates. Recent trends indicate a delay in the onset of the rainy season, with this year's rains beginning in late October, suggesting that early 2025 may continue to see elevated rainfall levels. Consequently, we forecast 4Q24F revenues at IDR 879 bn (-1.8% MoM; +14.2% YoY). Although December revenue might not reach the levels of Oct and Nov, overall the quarter is expected to exceed 2Q24 performance and surpass last year's figures, primarily thanks to the anticipated higher rain rates boosting service demand.

Initiate BUY call on BIRD with a TP of IDR 2,700/sh

With this, we see that BIRD is still undervalued, and we thus initiate a BUY call with a TP of IDR 2,700/sh (using 2025F PE 11.86x – 5 year avg.). Our rationale:
1. BIRD has surpassed its performance from the 2017-2018 ride-hailing boom, effectively adapting, to remain a strong competitor in an evolving market
2. As a market leader, BIRD sets industry ARPV benchmarks, influencing pricing standards that are often adopted by competitors, highlighting its dominant market role.
3. Distinct from its peers, BIRD has greater customer loyalty, prioritizing consistent service quality and value, shielding it from the frequent price wars and promotions that characterize the sector.
Potential risks may emerge from: low purchasing power – downtrading to cheaper services

BIRD - BIRD's Flying High

BIRD - BIRD's Flying High

Elgin Gavriel Liman

PT Blue Bird Tbk

28 November 2024 - 07.00am

BIRD - BIRD's Flying High

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