JSMR Aug2021

JSMR

Contact our analyst Eka

42% potential return, BUY
2nd August 2021
Price Rp 4,020
Target price Rp5,700

Traffic Recovery

In 1H2021, JSMR toll revenue increased +29.9% YoY to IDR 5.64 trillion in line with a total transaction volume increase of +15% YoY to 257.3 million vehicle transactions.
The growth was due to the sharp decrease in total transaction volume which took place in 1H2020 from the start of PSBB. Traffic decreased again in May, -40% in line with restrictions during Lebaran (second week of April until mid of May).
However, from the end of May until June 2021, the traffic and revenue recovered and even reached +12% higher than under normal conditions.
Since June the traffic & revenue are down again -38% lower than normal due to the recent increase in Covid-19 cases.
We expect lower traffic & revenue in 3Q2021 because of the emergency PPKM l in July – August 2021. But we expect a speedy recovery from an expect decline in PPKM and Covid-19 cases.

1H2021 higher Margin

In 1H2021, JSMR net income recorded a sharp increases of +709% YoY to IDR 855.6 billion due to a gain on divestment, resulting in a higher net profit margin of 15% from 2% in 1H020.
JSMR booked an IDR 788 billion divestment gain from the 14% stake in PT Marga Lingkar Jakarta (MLJ) the Jakarta Outer Ring Road to PT Jakarta Marga Jaya (Astra Infra) in 2Q2021.
For 2Q2021, JSMR recorded a net income increase +244% YoY and +328% QoQ to IDR 693 billion after a loss in 2Q2020. NPM increased to 24% from 6% in 1Q2021.
Operating income also increased +66% to IDR 3.46 trillion in 1H2021 with a higher operating margin of 61% from 48%.
EBITDA increased +40.7% YoY to IDR 3.62 trillion and the EBITDA margin increased to 64% from 59%.
We revise our JSMR 2021 forecast profit to IDR 1.19 trillion, which is +139% from 2020.

Valuation: TP 5,700, Maintain BUY

Our target for JSMR share price is IDR 5,700, offering investors a potential return of 42%, we maintain our recommendation to BUY. This would translate to a 2022F PE of 26x. Buy.