Indomobil Sukses Internasional More details on the new modified Evalia

Indomobil Sukses Internasional: More details on the new modified Evalia (IMAS, Buy, Rp5,400, TP: Rp6,550)

Subsequent to our yesterday’s comment on the newly launched modified Nissan Evalia, Nissan Motor Indonesia sent a press release detailing the specifications and prices. The company officially refreshes the existing SV model with additional new features and launches St model as a new line-up, aimed to provide better comfort at an affordable prices.

The SV variant – Nissan refreshed this model by refining its seat back material and installing an additional rear cooler and flush window. Previously, rear cooler and flush window can only be found in the highest XV variant. Based on our observations, prices are slightly raised by Rp10mn to Rp172mn for manual transmission (from Rp162mn) and Rp182mn for the automatic transmission (from Rp172mn). These imply a 5.8-6.2% increase, which is justifiable given Rupiah depreciation and rising raw material prices. For the high-end XV type, Nissan also raised the price to Rp182mn for the manual transmission (from Rp175mn) and Rp192mn for the automatic transmission (from Rp185mn)

The St variant – This variant is totally a new line-up, which we believe is used as a strategy to tap lower-end consumer segment with better features as compared to the lowest S segment that is being targeted for corporations. The features offered include power window, third row head rest, seat leg cover, inside door handle finisher, seat back material, and rear cooler air conditioning system. Offered in a manual transmission, Nissan priced this variant at Rp155mn, about 6% more expensive than the lowest-end variant but 10% cheaper than the manual transmission SV type.

No price increase for low-end model – In the new price list, we note that Nissan has increased selling prices by 4.9% on average (range: 3.8-6.2%), but not for the lowest-end S type that is relatively unchanged at Rp146mn (previous price: Rp145mn). We believe this is part of Nissan’s strategy in tapping the lucrative corporate segments, which believed to account for about one-third of the total domestic 4W sales.

Recommendation – Our forecast assumes 2,000 units of Evalia sales per month, yielding annual sales of 24,000 units for this year, forming 30% of our total 79,900 units of Nissan sales. For every 1,000 units additional Evalia sales per year, we estimate a 0.8% increase in IMAS’ EPS. At the moment, we have a Buy call with Rp6,550/share target price. IMAS would release 4Q12 results this month, which we think may not be as strong. Ramping-up 1Q13 sales would be the catalyst, in our view. IMAS now trades at 12.3x FY13F PE.

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