adi sarana armada

Adi Sarana Armada

Bloomberg: ASSA.IJ | Reuters: ASSA.JK

Logistic Sector 5 July 2021 JCI Index: 6,005

www.samuel.co.id of 20

King of Digital Logistic Ecosystem

We initiate our coverage on ASSA with BUY recommendation and a TP of IDR 3,000 (SOTP method). We expect ASSA’s digital ecosystem to grow rapidly, in line with the growth of the GMV of transportation & food sector which might reach USD 16 billion in FY25F. Anteraja is expected to be the main driver of ASSA's growth, with a CAGR growth potential of +29% and projected delivery rate of 648K (on average) in FY23F. According to our rather conservative projection, ASSA might record top-line and bottom-line growth of +28% and +44% 3YCAGR in FY21-23F.

Developing digital ecosystem. ASSA has more than 15 years of experience in logistics business, and it currently operates three integrated business pillars: 1) car rental, 2) Used car sales, 3) End-to-end logistics. Armed with its experience, ASSA innovates and develops its own digital ecosystem, starting with the establishment of express delivery company Anteraja as well as other tech ventures, including Share Car, Caroline, Cartalog, JBA Bidwin, Titipaja, Travylite, and Bisnisaja.

Top-line and bottom-line growth projection of +28% and +44% in FY21-23F. With the growth potential of the GMV of the transportation & food sector that might reach +28% CAGR in FY20-25F, and an estimated value of USD 16 billion in FY25F (vs. USD 5 billion FY20), we project Anteraja's daily parcel delivery rate to reach 648 thousand in FY23F, with a CAGR of +29% (vs. 300 thousand in FY20). These figures lead us to propose revenue and net profit growth forecasts of +28% and +44% CAGR in FY21-23F (IDR 6.3 trillion and IDR 251 billion) in FY23F. Our projection is conservative, and it is lower than the company’s projection of >1 million parcels delivered per day in FY25F.

Adequate capital structure despite capital-intensive business model. ASSA's net gearing ratio in FY20 was recorded at 194%, relatively higher than most companies. This is not unusual since ASSA's business model is capital intensive. However, we expect that the high net gearing ratio will not be a problem for ASSA. To fund its planned FY21 CapEx budget of IDR 1.3-1.5 trillion, ASSA will rely on bank loans (IDR 625 billion) and the proceeds of the rights issue of convertible bonds (IDR 720 billion). The CapEx funds will be focused on the procurement of new rental cars and expansion of Anteraja.

BUY with TP at IDR 3,000. ASSA’s valuation is calculated using the SOTP method, which measures the valuation of each of Anteraja’s business line, while we created Bull/Base/Bear valuation scenarios for Anteraja (see Figure 34). Our TP reflects an equity value of IDR 10.2 trillion. Risks: 1) prolonged COVID-19 pandemic 2) Justification of tech companies' valuations, and 3) risk of price wars.

Price Comparison

Cons. Target Price (IDR) 2,650

SSI vs. Cons. (%) 113.2

Stock Information

Last Price (IDR) 2,420

Shares Issued (Mn) 3,398

Market Cap. (IDR Bn) 7,781

52-Weeks High/Low (IDR) 2,550/396

3M Avg. Daily Value (IDR Bn) 46.3

Free Float (%) 35.7

Shareholder Structure:

Tri Putra Group (%) 44.2

BOD and BOC (%) 20.1

Stock Performance

(%) YTD 1M 3M 12M

Absolute 270.1 10.3 35.1 462.2

JCI Return (0.4) 2.1 (6.1) 21.0

Relative 270.4 8.2 41.2 441.2

Stock Price & Volumes, 12M

Company Background

Established in 2003 and listed since 2012, PT Adi Sarana Armada Tbk (ASSA) has an integrated transportation and logistics business line. ASSA is part of the Triputra Group. It is currently led by Prodjo Sunarjanto as CEO. ASSA's management has lots of experience in transportation business, with the majority of its management team being former directors of Astra International and AUTO2000.

Forecasts and Valuations (at closing price IDR 2,420 per share)

Y/E Dec 19A 20A 21F 22F 23F

Revenue (IDR Bn) 2,334 3,037 3,956 5,160 6,329

EBITDA (IDR Bn) 458 474 708 886 1,114

EV/EBITDA (x) 11.8 10.9 17.0 14.2 11.7

Net Profit (IDR Bn) 110 87 144 168 251

EPS (IDR) 32.5 25.7 42.3 49.6 74.0

EPS Growth (%) (23.1) (21.0) 64.9 17.2 49.2

P/E Ratio (x) 22.8 24.7 57.9 49.4 33.1

BVPS (IDR) 394 424 466 516 590

P/BV Ratio (x) 1.9 1.5 5.3 4.7 4.2

DPS (IDR) - - - - -

Dividend Yield (%) - - - - -

ROAE (%) 8.2 6.1 9.1 9.6 12.6

ROAA (%) 2.3 1.7 2.3 2.4 3.1

Interest Coverage (x) 1.4 1.2 1.8 1.9 2.3

Net Gearing (%) 198.4 194.2 231.1 235.6 223.5

BUY (Initiation)

Target Price (IDR) 3,000 (Initiation)

Potential Upside (%) 23.9

Nashrullah Putra +62 21 2854 8339 [email protected]

Adi Sarana Armada




Strong Background with >15 years in logistic business

ASSA was founded in 2003 under the name ADIRA Rent. In 2004 and 2006, ASSA established ADIRA Driver Services and ADIRA Logistics Service, which then transformed itself into PT Adi Sarana Armada in 2009. ASSA has been listed on the IDX since 2012, and started its digital business in 2014 by establishing a used car buying and selling platform, PT Adi Sarana Lelang (BidWin). In 2018, ASSA expanded its digital business by launching Share Car (an app-based car rental platform) and Caroline (a platform for buying and selling new and used cars). In 2019, ASSA acquired JBA (offline and online-based car auction platform) and established an express delivery service called Anteraja.

Figure 1. ASSA’s Key Milestone

Source: Company

ASSA is part of the Triputra Group. Its current ownership structure is as follows: public (35.7%), PT Adi Dinamika Investindo (25%), PT Daya Adicipta Mustika (also part of the Triputra group) (19%), T.P. Rachmat (5.2%), and the rest is controlled by its Board of Directors and Commissioners.

Figure 2. ASSA Shareholders’ Structure

Source: Company

Adi Sarana Armada




Building Ecosystem With Strong Business Pillars

In general, ASSA has three main businesses:

1) Transportation business, including car rental services for corporations (since 2003), driver rental services for corporations (since 2004), and an online car rental platform named Share Car (since 2018). The business contributed 51% of ASSA's revenue in FY20, and even had an EBIT that was 39% higher than the company's consolidated EBIT.

2) Used car sales business, including offline and online car auction platform called JBA Bidwin Auction (since 2014), as well as online car marketplace named Caroline (since 2018) and Cartalog (since 2020). The used car sales business contributed 13% of ASSA’s revenue and 56% of its EBIT in FY20, while the auction business contributed 6% of its revenue and 23% of its EBIT.

3) End-to-end logistics business, which is vertically integrated, starting from first-mile and middle-mile under ASSA Logistics (Since 2006) with a 5%/-40% contribution to ASSA’s total revenue/EBIT in FY20, and last-mile express delivery named Anteraja (since 2019), which contributed 26%/-77% of ASSA’s FY20 revenue/EBIT. ASSA continues to innovate in the digital segment by establishing a B2B operation management platform called Bisnisaja and E-fulfillment services named Titipaja.

Figure 3. ASSA Business Structure

Source: Company

Figure 4. Revenue Contribution, 2017-2020 (%)

Source: SSI Research, Company

Figure 5. EBIT contribution, 2017-2020 (%)


Adi Sarana Armada




#1st Pillar: A Stable Cash Cow

Car rental business is ASSA’s first-ever business, which was started in 2003-2004 with the establishment of ASSA Rent and ASSA Driver Services. Car rental is the business with the most stable profitability and largest contribution to ASSA’s revenue and operating profit compared to its other businesses.

ASSA's car rental business model goes like this: ASSA will acquire cars and rent them to its customers. After being rented and depreciating for four years, those cars will be sold at a price higher than its book value.

Figure 6. Car Rental Business Model

Source: Company

Figure 7. Number of Fleets and Utilization rate (%)

Source: Company, SSI Research

As of December'20, ASSA had 26,278 fleet units, and 23,127 of them were rented (91.37% utilization rate). ASSA has served more than 1,500 companies with various profiles: FMCG (28%), government agencies (7.4%), logistics (10.6%), banks (6.7%), and others (46.3%).

Figure 8. ASSA Rent Customer, Brand Composition, and fleets location, and Networks

Source: Company

Adi Sarana Armada




In FY20, ASSA’s car rental business generated IDR 1.54 trillion in revenue (+0.9% yoy). The insignificant growth was partly caused by the emergence of the COVID-19 pandemic, which slowed down business activities of practically every company. The small growth was in line with the growth of ASSA's rental car fleet, which was smaller than the previous year (2020; 314 units, +1.2% yoy; vs 2019; +2,319 units, +9.8% yoy). GPM and OPM from this segment fell by -243bps and -231bps respectively, in line with the decline in utilization rate of -100bps yoy. Since most expenses in this business were fixed, the small growth recorded in FY20 could not match the increase in expenses.

Going forward, we conservatively assume that ASSA’s car rental revenue will grow by +7%/+11%/+12% yoy in FY21/22/23F, assuming an annual fleet growth rate of 8-9% and an increase in rental rate cards of +3 % yoy annually. Our projection is lower than the company’s guidance, which stated that revenue from this segment could grow by 10-15%. Regarding margins, we project the GPM to reach 30-33% (vs. 28% FY20) and OPM to reach 17-18% (vs. 12% FY20), supported by higher utilization rates.

Figure 9. Revenue, Gross Profit & EBIT, FY18-23F (IDRbn)


Figure 10. Car Rental Margins (%)


ASSA is currently developing an online car rental platform named Share Car, where customers can rent cars that are already parked at predetermined points using a mobile app called Share Car. With this platform, ASSA can also get revenue from the general public, not only from corporates. At the moment, Share Car provides 366 units of cars for rent in Jakarta.

Figure 11. Share Car business Model

Source: Company

Adi Sarana Armada




#2nd Pillar: The Supporting Ecosystem

ASSA's second business pillar is basically there to support the previous one. After approximately four years of use, ASSA’s rental car units will be sold using its used car marketplace platforms. ASSA has started its used car sales business since 2014 by establishing a subsidiary called BidWin, which has been transformed into JBA Bidwin since 2019 (ASSA controls 51% of JBA Bidwin). JBA Bidwin has 18 branches spread throughout Indonesia, and has partnered with a number of multi-finance companies such as ADIRA Finance, BFI Finance, Clipan Finance, ACC, and other well-known multi-finance companies. The platform not only sells ASSA’s used rental car units, and the general public can also sell their cars on consignment in JBA Bidwin.

Figure 12. Car Auction Business Model

Source: Company

In addition, ASSA is developing other online platforms; Caroline and Cartalog. Caroline is quite similar to JBA Bidwin. However, while JBA is more focused on corporates, Caroline is focused more on the general public. Cartalog is an artificial intelligence-based application that can make it easier for its users to find the best used cars for them, using an algorithm in ASSA’s database. The two digital initiatives are very important for the development of ASSA’s digital ecosystem.

Figure 13. Caroline and Cartalog Business Model

Source: Company

Adi Sarana Armada




In FY20, ASSA’s revenue from used car sales fell -7.0% yoy to IDR 380 billion, mainly due to the pandemic, which caused sales of the whole car industry to drop ~-30% yoy. One positive note that must be considered is the fact that in FY20, ASSA's used car sales were much more resilient than the whole industry, since it only fell -2.0% yoy to 4,170 units. Furthermore, despite the decline in sales, GPM from the segment grew +15ppt to 20% (FY19: 5%), although the spike was mainly driven by the recording of JBA and BIdwin’s consolidation.

We project ASSA's used car sales revenue to increase by +6%/+13%/+13% yoy in FY21/22/23F, with car sales growth projections of +9%/+8%/+8% yoy, in line with the projected increase in ASSA Rent’s fleet units. Regarding its margin, we project the margin of the business to reach 22% during the period.

Figure 14. Revenue & EBIT, FY18-23F (IDRbn)


Figure 15. Sale of Used Car (unit)


Auction business was ASSA’s most profitable business in FY20, with a GPM of 78%. We project moderate revenue growth for the auction business (5-7%) in FY21-23F, with GPM and OPM of 79-80%, and 26-28% respectively.



Figure 17. GPM and OPM (%)


Adi Sarana Armada




#3rd Pillar: The Multibagger Engine Growth

End-to-end logistics business might become ASSA's main growth engine in the near future, since it is projected to contribute 45-50% of ASSA’s total revenue within the next 1-2 years. ASSA operates a logistics business with complete vertical integration, starting from first & middle-mile delivery (ASSA Logistic which focuses on the delivery of consumer goods), as well as last mile express delivery through Anteraja, which has the most attractive growth potential.

Figure 18: End-to-End logistic Chain

Soure: Company

Compared to other express delivery companies, Anteraja's uniqueness lies in its business model that combines traditional (drop-off) and modern (pick-up) concepts. The SATRIA (Anteraja’s couriers) can pick up the package from the sender, then send the package to the recipient. ASSA also provides various types of services, ranging from Regular (1-2 Days), Next Day (1 Day), and Same Day (~8 hours). Anteraja has penetrated 34 provinces in Indonesia, with more than 600 service points, and has collaborated with well-known e-commerce platforms in Indonesia, such as Tokopedia, Shopee, Bukalapak, JD.ID, and Blibli.

Figure 19: Anteraja Hybrid Business Model

Source: Company

Adi Sarana Armada




In growing Anteraja, ASSA was assisted by SF Express (controlling 20% of Anteraja), which is the largest and most profitable logistics holding in China which has been listed since 2016 with a market cap of CNY 319.042 million (June 24th, 2021), and PT Roda Bangun Selaras (25%) which is a private investment company owned by the co-founder of Tokopedia. ASSA itself controls 55% of Anteraja.

Figure 20. Anteraja Ownership Structure

Source: Company

The logistics industry is currently experiencing rapid growth, driven by the massive development of e-commerce. According to research from Google, Bain & Temasek, GMV growth of the e-commerce sector could reach 2.5x in FY25F, with a CAGR of +21%, and a projected total GMV of USD 83 billion. The transportation and food sectors have even better business prospects, with a projected GMV growth of 3.2x in FY25F and a CAGR growth of +28% to USD 16 billion. Another factor leading to such a high figure was the low-base effect in FY20 caused by the pandemic, which hampered the sector's growth.

Figure 21. Inconesia E-commerce GMV Trajectory (USDbn)

Source: Google, Temasek, Bain & Company Research

Figure 22. Inconesia Food&Transport GMV Trajectory (USDbn)


Such a large growth projection might encourage Anteraja to monetize the growth of its parcel delivery per day, since the growth of GMV should be in line with the supporting ecosystem.

Adi Sarana Armada




In FY20, ASSA delivered 300 thousand parcels per day (on average), three times more than FY19 (100 thousand/day). The growth was in line with the growth of ASSA’s courier staff, which reached 5,000 in FY20 (1Q21: 7,500), doubling the FY19 figure (2,500). Going forward, we project that ASSA might deliver 365/480/648 thousand parcels/day in FY21/22/23F, which reflects growth rates of +22%/32%/35% yoy. Our projection is much more conservative than the company’s, which projects a delivery rate of 2 million parcels /day in FY25F.

Figure 23. Average Package per Day (‘000)


Figure 24. Total number of Courier


Using our growth assumption, we expect ASSA's express delivery business to generate IDR 1.5/2.5/3.4 trillion in revenue in FY21/22/23F, up +99%/60%/35% yoy. The business generated IDR 13 billion in gross profit in FY20 (vs. gross loss of IDR -32 billion in FY19), but it still recorded an operating loss of IDR -107 billion. We expect the company to reach its break-even point when it records a delivery rate of ~320 thousand per/day. Thus, we project the business to start recording operating profit in 1Q21. According to our projections, Anteraja will contribute 40%/49%/54% of ASSA's revenue in FY21/22/23F, 21%/26%/29% of ASSA's gross profit in FY21/22/23F, and 16%/25%/29 % of its total EBIT in FY21/22/23F. Those figures are in line with management guidance, which states that the margin from the business will only reach a single-digit figure. Our projections reflect an EBIT margin of 5.0%/6.4%/7.3% in FY21/22/23F.



Figure 26. Anteraja Contribution (%)


Adi Sarana Armada




Huge Growth Potential Despite Conservative Forecast

Although we make fairly conservative projections, we still believe that ASSA has massive growth potential. On a consolidated basis, ASSA's revenue could grow by +30%/30%/22% in FY21/22/23F, with a CAGR of +28% to IDR 3.9/5.1/6.3 trillion. We project net profit growth rates ff +65%/17%/49% with a CAGR of +44% to IDR 144/168/251 billion. Since Anteraja might make larger contribution in FY21-23F, the GPM is projected to decline by -111bps/-23bps/-53bps to 24.9%/22.5%/22.0%. Anteraja’s GPM was noticeably lower than ASSA’s other business. However, assuming that Anteraja can start contributing to ASSA's EBIT in FY21F, we project ASSA's EBIT margin to increase by +263bps/-8bps/+83bps to 10.3%/12.9%/13.6%, with NPM growth rates of +372bps/19bps/142bps in FY21 /22/23F.



Figure 28. Profitability Margins (%)


Adequate CapStru Despite Capital-Intensive Business Model

Due to its capital-intensive business model, ASSA's DER and net gearing ratio were higher than most other companies. ASSA's DER and net gearing ratio in FY20 were recorded at 207% and 194% respectively. However, we expect that those numbers won’t be a problem for ASSA. To fund its IDR 1.3-1.5 trillion CapEx budget plan for FY21F, ASSA will take loans for the procurement of new rental car units for ASSA Rent (IDR 475 billion) and Anteraja’s working capital (IDR 150 billion). In addition, ASSA plans to issue 600 million convertible bonds through a rights issue with an exercise price of IDR 1,200, with an estimated proceeds of IDR 720 billion.

Figure 29: Leverage Metrics, FY19-23F


Adi Sarana Armada




1Q21 Result Update: In-line with Our Forecasts

ASSA's figures in 1Q21 were in line with our forecasts; its revenue rose +37.2% yoy (+8.54% qoq) to IDR 963 billion, gross profit grew +9.04% yoy (-3.2% qoq) to IDR 221 billion, and its EBIT went up by +14.1% yoy (-8.06% qoq) to IDR 97 billion. However, the company's net profit fell -6.32% yoy (-9.4% qoq) to IDR 33 billion. These figures reflect 24.4% and 22.7% of SSI’s projections for FY21F (consensus: 25.4% & 23.3%).

All of ASSA’s consolidated margins declined in 1Q21, including GPM (-593bps), OPM (–204bps), and NPM (-157bps). This occurred since Antaraja's contribution to ASSA's total revenue in 1Q21 was larger than before (Anteraja's GPM was lower than ASSA's consolidated GPM).

Anteraja contributed 38% of ASSA’s total revenue in 1Q21 (vs. 33% in 4Q20 and 14% in 1Q20). The increase was driven by the substantial growth in Anteraja's revenue of +290% yoy (+26% qoq) to IDR 391 billion. ASSA's car rental segment was relatively flat in 1Q21, while its used car sales segment grew by +10% yoy (-18% qoq).

Figure 30. 1Q21 results

(IDR bn) 4Q20 1Q20 1Q21 QoQ (%) YoY (%) 1Q21/Cons (%) 1Q21/SSI (%)

Revenue 887 702 963 8.54 37.29 25.4 24.4

Gross Profit 228 203 221 -3.29 9.04 n.a 22.4

Operating Profit 106 85 97 -8.06 14.12 25.8 19.0

Net Profit 36 35 33 -9.44 -6.32 23.3 22.7

Gross Profit Margin (%) 25.7 28.9 22.9 -280.33 -593.90

Operating Margin (%) 11.9 12.1 10.1 -181.81 -204.46

Net Margin (%) 4.1 5.0 3.4 -67.22 -157.55

( chg. bps)

Rental (IDRbn) 4Q20 1Q20 1Q21

Revenue 420 409 418

Gross Profit 121 138 124

EBIT 59 71 71

Gross Profit Margin (%) 29 34 30

Operating Margin (%) 14 17 17

Used Vehicle (IDRbn) 4Q20 1Q20 1Q21

Revenue 94 126 103


EBIT 14 19 36



Logistic (IDRbn) 4Q20 1Q20 1Q21

Revenue 61 52 76

Gross Profit 8 9 11

EBIT 6 9 7



Auction (IDRbn) 4Q20 1Q20 1Q21

Revenue 57 45 47


EBIT 21 16 9



Anteraja (IDRbn) 4Q20 1Q20 1Q21

Revenue 310 100 391

Gross Profit 39 (13) 26

EBIT 4 (15) (33)

Gross Profit Margin (%) 13 (13) 7

Operating Margin (%) 1 (15) (8)


Adi Sarana Armada




Valuations: Massive Upside Potential, but We Stay Conservative

To calculate ASSA's valuation, we use SOTP (Sum of the Parts) method. We calculated the valuation of each of ASSA’s businesses with methods that are most suitable for them.

#1st Part: DCF Valuation on Car Rental, Used Car, and Conventional Logistic services

We calculated the valuation of ASSA’s conventional businesses using discounted cash flow method, with 5-year projection plus terminal value and following assumptions: WACC of 9.0%, 10% in cost of equity calculation (Rf 6.2%, Market premium 4.2%, beta 0.96), cost of debt of 7.4%, and TG of 3%. The result shows an equity value of IDR 5.9 trillion.

Figure 31. DCF Valuation on ASSA’s conventional business

DCF Valuation - ASSA Rent, Sale of used car, and Conventional logistic business

Y/E Dec (IDR Bn) 20A 21F 22F 23F 24F 25F Terminal Value

EBIT 270 369 431 538 619 710

Capex (408) (414) (350) (346) (250) (269)

D&A 162 198 224 251 270 290

Chg.in WC 130 37 48 47 77 35

Tax (5) (57) (76) (115) (181) (218)

FCFF 148 133 278 375 535 547 11,431

Disc. Rate 1.00 0.92 0.84 0.77 0.71 0.65

PV of FCFF - 122 234 289 379 356 6,134

Sum of FCF 1,380

PV of TV 7,438

(+) Cash 81

(-) Debt (2,987)

Eq.Value 5,912

Source: SSI Research

#2nd Part: Auction business using EV/EBIT multiple

We calculated the valuation of ASSA’a auction business using EV/EBIT multiple with multiple target of 15.5x, reflecting +2SD of its 5-year average, applied to its EBIT projection for FY22F of IDR 52 billion. Using this method, we obtained an equity value of IDR 802 billion. We then divided the figure with ASSA's ownership portion (51%), which equals IDR 409 billion.

Figure 32. Auction Business business valuation using EV/EBIT Multiple.

Auction Business - EV/EBIT Multiple

FY22 Unit Note

2022 EBIT 52 IDRbn

Target multiple 16 x STD +2 5year band

Eq.Value 802 IDRbn

ASSA Stake 51%

Value for ASSA 409 IDRbn Source: SSI Research

Adi Sarana Armada




#3rd Part: Anteraja valuation using EV/package multiple

Due to its massive growth potential, technology-based express delivery businesses are usually highly valued by the. For instance, the valuation of J&T (an express delivery company) is USD 7.8 billion (IDR 113 trillion). There are rumors that J&T will carry out an IPO with an estimated value of USD 1 billion. J&T is the market leader in the express delivery sector, with an average delivery rate of 2 million parcels per day in FY20. Another example is Sicepat, whose valuation was reported to have reached USD 0.8 billion (almost a unicorn) after receiving series B funding in March'21. Sicepat is the second-largest express delivery company in Indonesia, with 1 million parcels shipped per day in FY20. In addition to national delivery services, J&T and Sicepat also offer international shipping solutions.

To justify the valuation of ASSA’s technology-based express delivery business, we use EV/ average daily delivery rate. We assume that the growth of average daily delivery rate of J&T and Sicepat is the same as Anteraja. The sector average is a simple average of 26.2x 21F EV/package. We assume three scenarios: Bull, Base, and Bear, by applying 20.9x/18.3x/13.1x EV/package, which reflects a discount of 20%/30%/50% of the sector average. Using this method, we obtained a valuation of IDR 7.6/6.6/4.7 trillion.

We then divided the figure with ASSA’s ownership portion in Anteraja (51%), and we have three figures; IDR 3.9 trillion (Bull), IDR 3.4 trillion (Base), and IDR 2.4 trillion (Bear).

Figure 33: Anteraja Valuation Scenarios

Express (Anteraja)

J&T Sicepat Anteraja (bull) Anteraja (Base) Anteraja (Bear)

Avg. Package/Day FY20 ('000) 2,000 1,000 300 300 300

Avg. Package/Day FY21F ('000) 2,600 1,300 365 365 365

Est. EV (USDbn) 7.8 0.8 0.5 0.5 0.3

Est. EV (IDRbn) 113,100 11,600 7,654 6,697 4,784

EV/Parcel multiple (million x) 44 9 20.97 18.35 13.11

26.2 20.97 18.35 13.11

20% 30% 50%

51% 51% 51%

3,903 3,415 2,440

Average (million x)

ASSA's Stake

Discount to peers (%)

Anteraja Value for ASSA (IDRbn)

Source: Crunchbase, DSA, SSI research

Adi Sarana Armada




Initiate BUY, TP at IDR 3,000

Our valuations for ASSA’s businesses led us to an equity value estimates of IDR 10.2/9.7/8.7 trillion, reflecting 19.7x (Bull) /19.0x (Base) /17.7x (Bear) 21F EV/EBITDA. The valuation is quite premium (+4SD of its 5-year EV/EBITDA average. Despite its premium valuation, with a net profit growth potential of +44% 3Y CAGR and the rapid growth of the technology-based logistics business, ASSA's current valuation is still attractive.

We initiate a BUY recommendation on ASSA, with TP at IDR 3,000 based on SOTP valuation with Bull scenario.

Figure 34: SOTP Calculation

SOTP Valuation

Segment Assumption IDRbn Method

Rental, Used car, Logistic 9% WACC, 3% TG 5,912 5Y DCF

Auction 15.5x EV/EBIT 409 +2SD 5Y band

Anteraja Bull 18.3x EV/Parcel 3,903 20% discount to peers average

Anteraja Base 15.7x EV/Parcel 3,415 30% discount to peers average

Anteraja Bear 13.1x EV/Parcel 2,440 50% discount to peers average

3.4 (IDR bn)

10,225 3,011

9,737 2,867

8,761 2,580 Derived Fair Value (Bear)

Sum of The Parts

Number of Shares Outstanding (bn shares)

Derived Fair Value (Bull)

Derived Fair Value (Base)

Source: SSI Research

Figure 35. EV/EBITDA Band


Figure 36. P/E Band


Adi Sarana Armada




Honorable Mentions:

ASSA’s Other Growth Drivers

Apart from the businesses mentioned above, ASSA has other business lines with very attractive prospects, which are established as part of the development of its digital ecosystem, namely:

Share Car: Changes on Car Rental Business

Share Car will give a new breath of fresh air to ASSA's car rental business. With an app that anyone can use, ASSA can now obtain revenue from the general public, and no longer depend on corporate demands.

Caroline and Cartalog: Boosters of Used Car Sales

With a tech-based system that will help users find the best used cars for them, Caroline and Cartalog will make it easier for ASSA to sell their used rental car units.

Bisnisaja, Travylite, dan Titipaja: Anteraja’s New Initiatives

Anteraja recently expands its digital ecosystem through the launch of Bisnisaja (a platform that can help small businesses manage their logistics needs), Travylite (excess baggage delivery application, which has partnered with PT Angkasa Pura II), and Titipaja (e-fulfillment or app-based warehouse sharing services).

Figure 37. ASSA’s New Initiatives To Support Digital Logistic Ecosystem

Source: Company

Adi Sarana Armada




Risks

Prolonged Pandemic: Restricted Mobility

The COVID-19 pandemic is a concern for us, because public mobility is one of the factors that determine ASSA’s profitability. If public mobility is restricted due to the explosion of COVID-19 cases, there is a possibility that ASSA Rent's tenants might not renew their rental contracts.

Valuation on Tech Business: Double-Edged Sword

On average, technology-based businesses are less than ten years old. However, due to their massive growth potential, they are often given premium valuation. If some technology-based companies cannot meet the high expectations, it might suppress Anteraja’s valuation expectations. In our SOTP valuation, Anteraja has a significant share, contributing 28-38%.

Tight Competition: Possibility of a Price War

The rapid growth of the express delivery sector may lead to the risk of intense competition, which may trigger a price war. ASSA’ express delivery business is estimated to have only single-digit margins. If a price war occurs, it is feared that Anteraja's profitability will decline even further. We consider that the price set by Antaraja is quite competitive, either for its Regular, Next Day, Same Day, and Intercity services.

Figure 38. ASSA’s Pricing compared to peers

Regular (2-3 day) Next Day Same Day Intercity

Anteraja 11,000 16,000 30,000 20,000

J&T Express 12,000 20,000 n/a n/a

Sicepat 12,000 16,000 n/a n/a

JNE 10,000 24,000 n/a n/a

GoSend n/a n/a 24,000 18,000

Grab n/a n/a 23,000 17,000

Source: SSI Research, Various Sources (Note: Regular, Next Day & Same Day using Jakarta-Bandung distance, Intercity from Menara Imperium Kuningan to BSD; Same distance & same day)

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Key Managements

In our opinion, ASSA has a capable management team, led by Prodjo Sunarjanto (since 2011) as CEO. He is an iconic figure in the transportation industry, who previously served as President Director of AUTO 2000 (part of the Astra International group). In addition, all of the members of ASSA's Board of Directors have served in strategic positions in the transportation sector and filled several important posts in Astra Group.

Figure 39. ASSA’s key managements

Source: Company

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Profit and Loss Cash Flow

Y/E Dec (IDR Bn) 19A 20A 21F 22F 23F Y/E Dec (IDR Bn) 19A 20A 21F 22F 23F

Revenue 2,334 3,037 3,956 5,160 6,329 Net Profit 110 87 144 168 251

Cost of revenue (1,590) (2,247) (2,971) (3,998) (4,938) D&A 108 162 198 224 251

Gross Profit 745 790 985 1,161 1,391 Changes in Working Capital (366) 52 37 48 47

Operating Expenses (394) (478) (475) (500) (528) Operating Cash Flow (148) 301 379 441 549

Operating Profit 351 312 510 661 863 Capital Expenditure (590) (408) (1,243) (909) (899)

EBITDA 458 474 708 886 1,114 Others 442 267 - - -

Other Income (Expense) 11 10 7 (3) (3) Investing Cash Flow (148) (141) (1,243) (909) (899)

Finance Expense (244) (254) (280) (340) (380) Net - Borrowing 560 77 753 521 435

Pre-tax profit 117 69 237 318 480 Other Financing (237) (300) - - -

Income Tax (26) (5) (57) (76) (115) Financing Cash Flow 323 (224) 753 521 435

Profit for Period 92 64 180 242 365 Net - Cash Flow 28 (63) (111) 53 85

Minority Interest 19 23 (36) (73) (114) Cash at beginning 228 255 192 81 133

Net Profit 110 87 144 168 251 Cash at ending 255 192 81 133 218

Balance Sheet Key Ratios

Y/E Dec (IDR Bn) 19A 20A 21F 22F 23F Y/E Dec 19A 20A 21F 22F 23F

Cash & equivalents 255 192 81 133 218 Gross Profit Margin (%) 31.9 26.0 24.9 22.5 22.0

Receivables 286 338 441 575 705 Operating Margin (%) 15.0 10.3 12.9 12.8 13.6

Others 112 98 111 129 146 EBITDA Margin (%) 19.6 15.6 17.9 17.2 17.6

Total Current Asset 653 628 632 837 1,069 Pre-Tax Margin (%) 5.0 2.3 6.0 6.2 7.6

Net Fixed Asset 3,894 4,140 5,186 5,870 6,518 Net Profit Margin (%) 4.7 2.9 3.6 3.3 4.0

Other Non-Current Asset 303 403 403 403 403 Debt to Equity (%) 217.5 207.5 236.2 243.2 234.4

Total Asset 4,849 5,171 6,221 7,110 7,990 Net Gearing (%) 198.4 194.2 231.1 235.6 223.5

ST. Bank loan 847 900 900 1,421 1,856

Payables 324 504 657 857 1,051 Major Assumption

Other current Liability 69 33 33 33 33 19A 20A 21F 22F 23F

Total Current Liability 1,240 1,437 1,590 2,311 2,940 Total Fleets (unit) 25,964 26,278 28,643 30,934 33,409

LT.Debt 2,064 2,087 2,840 2,840 2,840 Rental Ratecard Hike (%) 3.0% 3.0% 3.0%

Other LT Liabilities 207 208 208 208 208 Avg. Package per Day ('000) 23 300 365 480 648

Total Liabilities 3,511 3,732 4,637 5,358 5,987 Number of Courier 2,500 5,000 9,150 12,078 16,305

Minority Interest 146 156 156 156 156 Sale of used car growth (%) 5.0% 8.0% 8.0%

Total Equity 1,338 1,439 1,583 1,752 2,003

Last Price Market Cap Net income FY20

(IDR Full) (IDR Tn) (IDR bn) FY20 21F FY20 21F FY20 21F

ASSA 2,290 7.98 119.9 6.1 9.1 89.2 54.1 5.4 4.9

MPMX 700 3.15 119.9 1.9 N/A 25.7 N/A 0.5 N/A

IMAS 895 3.44 (545.9) N/A N/A N/A N/A 0.3 N/A

BOGA 1,315 5.36 9.7 2.6 N/A 438.3 N/A 11.4 N/A

3.4 157.7 5.4

TickerROE P/E P/BV

AverageSource: SSI Research, Bloomberg (valuation at last price)

Key Financial Figures

Peers Comparison

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Research Team

Suria Dharma Head of Equity Research, Strategy, Banking, Consumer Staples

[email protected] +6221 2854 8148

Lionel Priyadi Economist [email protected] +6221 2854 8854

William Mamudi, CFTe, CMT Technical Analyst [email protected] +6221 2854 8382

Muhamad Alfatih, CSA, CTA, CFTe Senior Technical Portfolio Advisor [email protected] +6221 2854 8129

Yosua Zisokhi Cement , Cigarette,Paper, Plantation,Telco Infra, Chemical


Dessy Lapagu Aviation, Coal, Metal, Retail [email protected] +6221 2854 8392

Selvi Ocktaviani Automotive,Construction, Mining Cont., Precast,Telco, Toll Roads


Nashrullah Putra Media, Poultry [email protected] +6221 2854 8739

Olivia Laura Anggita Healthcare, Property [email protected] +6221 2854 8346

Ahmad Fadillah Oil & Gas [email protected] +6221 2854 8144

Calista Muskitta Research Associate [email protected] +6221 2854 8331

Adolf Richardo Editor, Translator [email protected] +6221 2854 8396

Equity Institutional Team

Benny Bambang Soebagjo Head of Institutional Equity Sales [email protected] +6221 2854 8312

Ronny Ardianto Institutional Equity Sales [email protected] +6221 2854 8399

Fachruly Fiater Institutional Equity Sales [email protected] +6221 2854 8325

Henry Sutanto Institutional Equity Sales [email protected] +6221 2854 8329

Sylviawati Customer Service [email protected] +6221 2854 8193

Private Wealth Management

Evelyn Satyono Head of PWM Equity Sales [email protected] +6221 2854 8380

Clarice Wijana PWM Equity Sales [email protected] +6221 2854 8395

Gitta Wahyu Retnani PWM Equity Sales [email protected] +6221 2854 8365

Wahyudi Budiyono Dealer [email protected] +6221 2854 8152

Equity Retail Team

Lucia Irawati Retail Equity Sales [email protected] +6221 2854 8173

Salt World Widjaja Retail Equity Sales [email protected] +6221 2854 8163

Fixed Income Sales Team

R. Virine Tresna Sundari Head of Fixed Income [email protected] +6221 2854 8170

Rudianto Nugroho Fixed Income Sales [email protected] +6221 2854 8306

Sany Rizal Keliobas Fixed Income Sales [email protected] +6221 2854 8337

Julio Simangunsong Fixed Income Sales [email protected] +6221 28548384

Thita Rossiana Putri Admin & Sales Support Fixed Income [email protected] +6221 28548385

Online Trading Sales Team

Joseph Soegandhi Head of OLT [email protected] +6221 2854 8872

Nugroho Nuswantoro Head of Marketing Online Trading [email protected] +6221 2854 8372

Wahyu Widodo Marketing [email protected] +6221 2854 8371

DISCLAIMER: Analyst Certification: The views expressed in this research accurately reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst(s) principally responsible for the preparation of this research has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. This document is for information only and for the use of the recipient. It is not to be reproduced or copied or made available to others. Under no circumstances is it to be considered as an offer to sell or solicitation to buy any security. Any recommendation contained in this report may not be suitable for all investors. Moreover, although the information contained herein has been obtained from sources believed to be reliable, its accuracy, completeness and reliability cannot be guaranteed. All rights reserved by PT Samuel Sekuritas Indonesia.

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