JSMR
Contact our analyst Eka
24% potential return, BUY
23 June 2020
Price Rp 4200
Target price Rp5,200
23 June 2020
Price Rp 4200
Target price Rp5,200
June growth Improvement
1Q2020FY: Better than expected
Valuation: TP 5,000, Maintain BUY
- In 1Q020, JSMR’s toll road revenues, both mature and subsidiaries, declined by about 45%, due to the covid-19 outbreak and physical distancing which is now entering a re opening period. The March - April 2020 period saw a further deterioration to -50%.
- Mature toll road revenue has dropped 35% for weekends, and 25% for weekdays. While at the subsidiary level toll road revenue has declined 38% for weekends and 30% for weekdays. But there has been an improvement in June weeks 1 and 2 compared to the March – May 2020 period.
- As the re opening period will allow for some economic activities, we expect the rate of decline of JSMR’s toll road revenues will reduce gradually.
1Q2020FY: Better than expected
- JSMR recorded IDR 2.73 trillion from toll and other operating revenue, up +8.6% yoy in 1Q2020. The contribution of toll revenue at the subsidiary level was 31.1% or IDR 923 billion in 1Q2020 from IDR 488 in 1Q2019, an increase of 29.7% YoY. The higher toll revenue at the subsidiary level is the result of additional new toll roads.
- EBITDA grew +4.8% yoy to IDR 1.90 trillion, which resulted in a decrease in the EBITDA margin from 71.8% in 1Q2019 to 69.3% in 1Q2020.
- Net income grew +0.53% yoy to IDR 587.9 billion.
- We are upgrading our 2020 forecasts as the 1Q2020 result was above our expectations. We now expect 2020F net income of IDR 2.21 trillion, which would mean growth of +0.2% YoY.
Valuation: TP 5,000, Maintain BUY
- We update our one year target price for JSMR to IDR 5,200, offering investors a potential return of 24%. This would also translate into 2021F PE of 15.6x. We recommend BUY.
