JSMR Jul2021

JSMR

Contact our analyst Eka

46% potential return, BUY
5th July 2021
Price Rp 3,490
Target price Rp5,100

Expecting Lower Traffic

In 1Q2021, JSMR toll revenue increased slightly +0.80% YoY to IDR 2.76 trillion while total transaction volume decreased by -20.4% YoY to 257.3 million vehicle transactions. The decreases was due to the Public Activity Restrictions PPKM since January 2021.
The traffic increased again in the first week of April +7%. But from the restrictions during Lebaran (second week of April until mid of May) the traffic and revenue decreased by -40% in May.
From the end of May until June 2021, the traffic and revenue recovered and even reached +12% higher than under normal conditions.
However, the increases in Covid-19 cases since mid June made the government restrict mobility again which has caused another decrease (-3%) in traffic & revenue.
We expect lower traffic & revenue in 3Q2021 as the emergency PPKM Java – Bali (work from home 100%, shopping malls close, no dining) will start in July 2021.

Margin Decreased & Divestment

In 1Q2021, JSMR net income decreased by -72.5% YoY to IDR 161.9 billion, resulting in a lower net profit margin of 6% from 22% in 1Q2020.
Lower net income was due to higher finance costs +54.7% YoY to IDR 1.19 trillion.
Operating income also decreased -7.9% to IDR 1.53 trillion with a lower operating margin of 56% from 61%.
Meanwhile, EBITDA increased +1.7% YoY to IDR 1.93 trillion and the EBITDA margin slightly increased to 70% from 69.3%.
We cut our JSMR 2021 forecast profit to IDR 727 billion, which is +45% from 2020.
JSMR sold a 14% stake in PT Marga Lingkar Jakarta (MLJ) the Jakarta Outer Ring Road to PT Jakarta Marga Jaya (Astra Infra) with total proceeds of IDR 260 billion. After the transaction, JSMR owns 51% and Jakarta marga Jaya 49%.

Valuation: TP 5,100, Maintain BUY

Our target for JSMR share price is IDR 5,100, offering investors a potential return of 46%, we maintain our recommendation to BUY. This would translate to a 2022F PE of 31x. Buy.