Rated Underperform, Astra's Target Increases

VIVAnews - A research team of PT CIMB-GL Securities Indonesia maintains the underperform rate of PT Astra International Tbk (ASII) shares. However, based on sum of parts method, the targeted price is set higher to Rp 15,300 from the previous Rp 10,650.

"The revision is due to an upgrade in the agribusiness sector," said Director of CIMB-GK Securities Indonesia, William Henley, in his research on Astra International on Monday, April 27, in Jakarta.

The assumption being used to revise the targeted price is that crude oil price is 12 to 21 percent higher and sales of heavy machineries are higher by 2010 using recovery method. In addition, there is no change in automotive industry.

According to the research, three main businesses of Astra International are seriously shaken. PT Astra Agro Lestari Tbk (AALI) experiences volume (minus 9.1 percent) and price (minus 36 percent) contraction.

Meanwhile, the automotive sector, which is sensitive to interest rate, is under the similar situation. Its volume decreases by between seven and 37 percent and the currency depreciates by six percent. As a result, price increase from 10 to 15 percent is not sufficient to cover the margin.


Translated by: Bonardo Maulana Wahono