Analyst: Jeremy Mikael
Starting January 5, 2025, the government will implement a new rule regarding vehicle tax through Law No. 1/2022 replacing Law No. 28/2009. The rules? There is an additional 66% tax opsen for Motor Vehicle Tax (PKB) and Motor Vehicle Transfer Fee (BBNKB), calculated from the amount of tax. The good news is that electric vehicles (BEV) are safe because the PKB & BBNKB are 0, so they are free from tax opsen! 🚙⚡
🔁 What has changed?
* PKB & BBNKB Dropped: The maximum rate of PKB is 1.2% (from 2%), and BBNKB has dropped to 12% (from 20%).
* Jakarta Different Story: Tax opsen does not apply to Jakarta, but BBNKB increased from 10% to 12.5%, this certainly has an impact on OTR prices for vehicles in Jakarta to increase by around 2.5%.
* What about other provinces? If the opsen is implemented, the OTR price in the West Java, Central Java and East Java regions will increase by 4-7%, in line with the annual vehicle tax which has soared by 6-33%.
What does it mean?
Bev is more attractive to consumers, but for non-BEV or hybrid vehicles, the cost of ownership will be heavier. The large province in Java, which is the main market for 4W & 2W vehicles (41% market share) is still considering this policy, so the automotive sector needs to be vigilant. 🚘
🔍 Downgrade ASII to HOLD ; but still at IDR5,600
Because this tax-related regulation is still a plan and has the potential to be an overhang, we lowered the recommendation for ASII to Hold with a SOTP-based TP at IDR5,600 (7.3x 2025E P/E). Upside is limited and regulatory risk is the main reason for this decision.
💡 Upside/downside risks:
1️⃣ Better/bad-than-expected purchasing power recovery.
2️⃣ Sales 4W & 2W are stronger/weaker than expected.
3️⃣ Commodity prices (coal & CPO) are higher/lower than the estimate.
Full pdf: asi_241205
Disclaimer on:
Buying and selling decisions are personal responsibility
Regards
Investment Specialist
