JSMR Apr2021

JSMR

Contact our analyst Eka

34% potential return, BUY
9 April 2021
Price Rp 4,280
Target price Rp5,730

4Q2020 traffic volume increase

JSMR toll revenue decreased 12.7% YoY to IDR 9.59 trillion in line with lower volume of -20.4% YoY to 978.45 million vehicle transactions in 2020. For 4Q2020, toll revenue grew 10% QoQ to IDR 2.74 trillion, this is almost equal to 1Q2020 revenue.
In early 2021, traffic has decreased again and will mean a toll revenue decrease of up to -13% compared to normal conditions due to the implementation of Public Activity Restriction (PPKM) since 11 Jan 2021.
However, in March revenue has been steadily recovering and is now only 2% away from a return to normal conditions.
JSMR will also raise several toll road tariffs in 1H2021 which should have been done in 2020.
The government has again banned homecoming this year. The government also will implement strict regulation H-7 at Eid (entering or leaving Jakarta must be with a permit letter).
We are conservative for traffic volume growth this year. We expect traffic in 1H2021 will not be different from last year. But we expect better traffic in 2H2021 amid a decreased in the number of covid-19 cases and the vaccine program that continues on schedule.

4Q2020FY: Recovery continues

After a fall in 2Q2020, then a recovery with more positive results in 3Q2020 the recovery continued in the 4Q2020 results.
Net income grew by 562% QoQ to IDR 343.4 billion from IDR 51.8 billion, resulting in a higher net profit margin of 12% from 2% in 3Q2020.
However, the 4Q2020 improvement still has not offset the decline in the previous quarters. So for 2020, EBITDA still dropped -13% YoY to IDR 5.98 trillion from IDR 6.88 trillion in 2019. The EBITDA margin slightly decreased to 62.4% from 62.7%. Net income also fell sharply -77% YoY to IDR 501 billion from IDR 2.2 trillion in 2019. In line with a drop in the Net profit margin from 20% in 2019 to only 5% in 2020.
As we expect the recovery to continue in 2021, we are forecasting toll road revenue and profits for 2021F to be IDR 10.5 trillion and IDR 987 billion, which is a +10% and +97% increase respectively.

Valuation: TP 5730, Maintain BUY

Our target for JSMR shares price is IDR 5,730, offering investors a potential return of 34%, we maintain our recommendation to BUY. This would translate to a 2022F PE of 23x. Buy.