3Q25 performance should not disappoint
We expect AUTO’s 3Q25 results to show solid revenue growth, which should trickle down to bottom line. Despite weak domestic 4W market (wholesales: -17.4% YoY, retail: -14% YoY), export demand remained strong, growing +17.5% YoY for Completely Built-Up (CBU) and +14.2% YoY for Completely Knocked-Down (CKD) units. As a result, 4W production declined only 6.5% YoY, indicating resilient output. Meanwhile, 2W sales were stable, posting 0.7% YoY growth in 3Q25. We also project gross margin improvement to 17%, supported by economies of scale. Backed by triple combination of higher revenue, better margins, and stronger affiliate contributions, we expect AUTO to record double-digit net profit growth. We maintain BUY on AUTO with a TP of IDR 2,880.

Resilient 4Q production and 2W sales in 3Q25
Updates on 3Q25 operational data from Gaikindo and AISI:
4W sales. 3Q25 proved challenging for Indonesia’s 4W domestic market, with wholesales down 17.4% YoY and retail sales down 14.1% YoY. Although GIIAS 2025 recorded 12% YoY increase in sales volume to 38,929 units, transaction value plunged 37% YoY to just IDR 11.8 trillion. In addition, massive protests in late August to early September may have also weighed on consumer sentiment and sales. On a positive note, export performance remained strong, with CBU exports rising to 148.4 thousand units (+17.5% YoY) and CKD exports up 14.2% YoY to 17 thousand sets.
4W production. In 3Q25, Indonesia’s 4W production reached 302.5 thousand units (–6.5% YoY; +15% QoQ), bringing 9M25 production to 855 thousand units (–3.4% YoY). For AUTO’s clients, production totaled 296.9 thousand units (–4.5% YoY; +15.1% QoQ), reflecting a more moderate contraction compared to the broader industry.
2W sales. In 3Q25, Indonesia sold 1.87 million 2W units (+0.7% YoY; +20.5% QoQ), consisting of 1.73 million domestic sales (+1.8% YoY; +21.9% QoQ) and 141.4 thousand export units (–11.4% YoY; +5.6% QoQ). Cumulatively, 9M25 2W sales reached 5.25 million units (–0.5% YoY), comprising 4.84 million domestic units (–0.7% YoY) and 410.2 thousand export units (–10.5% YoY).

3Q25 projection – Well-delivered growth
We project AUTO’s 3Q25 performance to continue showing growth both QoQ and YoY, supported by several key factors: a) 3Q is typically AUTO’s strongest quarter due to longer working days compared to other periods, b) Solid 2W sales and only a minor decline in 4W production, and c) company’s efforts to increase its market share
a) Revenue: +3.4% yoy and 9.7% qoq, supported by strong performance in 2W manufacturing and modern retail distribution.
b) Margin: We expect gross margin to reach around 17%, up roughly 1 ppt YoY and QoQ, driven by economies of scale. Fixed costs such as depreciation should remain stable, allowing higher production volumes to translate into stronger margins.
c) Double-digit bottom line growth: We forecast double-digit bottom-line growth, with net profit up 10.7% YoY and 31.6% QoQ, supported by higher revenue, improved cost efficiency, and increased contributions from affiliates
d) Income from affiliates: Affiliate income is projected to rise +10.8% YoY, as AUTO’s associated companies continue to benefit from economies of scale.

Maintain BUY with TP IDR 2,880
Maintain BUY. We maintain our 2025–2026F projections as we await the release of 9M25 results. We also reiterate our BUY recommendation on AUTO with a target price of IDR 2,880, implying 2025F P/E of 6.8x, or +0.5SD above its 3-year average. At present, AUTO is trading at 5.4x 2025F P/E, offering compelling upside potential.

SIDO - Making a Comeback

SIDO - Making a Comeback

Ervina Salim

PT Sido Muncul Tbk

29 April 2024 - 02.02pm

SIDO - Making a Comeback

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