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Company Reports

30 October 2024

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ASSA: 3Q24 Results – BUY, SSI TP: IDR 1,200

Our take on the results (SSI: In-line, Cons: Above)

  • Robust 3Q24 earnings of IDR 84 billion (+71.4% YoY, +47.4% QoQ), driven mainly by jumps in auction revenue (IDR 72 billion; +36.1% YoY, +12.8% QoQ) due to car buyers downtrading, and delivery service sales (IDR 420 bn; +30.6% YoY, +13.9% QoQ) on the back of initiation of cold storage business.
  • Looking ahead, the company is optimizing its cold storage business through Coldspace and aims to further raise refrigerated delivery services. ASSA is improving its delivery service segment by adding first and mid-mile services, which could continue to boost overall top-line and margins.
  • The expansion of EBIT margin to 17.1% (+890 bps YoY, +400 bps YoY), which we attribute to the shift in courier incentive policy from fixed salary to commission-based, was the factor that bolstered 3Q24 earnings.
  • Thus, we maintain our BUY recommendation on ASSA with TP of IDR 1,200 (SOTP-based), reflecting 15.4x P/E 2025F. Risks to our call include fierce competition from other logistics service providers and high net gearing of 1.1x with 5.5% cost of debt.

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