JSMR
Contact our analyst Eka
62% potential Upside, BUY
13 March 2023
Price Rp 3360
Target price Rp5440
13 March 2023
Price Rp 3360
Target price Rp5440
Double-digit traffic volume growth
4Q2022: one-off gains from divestment
Valuation: TP 5,440, Maintain BUY
- JSMR’s traffic or toll transaction volume continues to grow double digits, up by +15.3% YoY in 2022FY. Subsidiary toll road transaction volumes increased +20.6% YoY from higher growth from the Cawang – Cengkareng toll road of +22.1% while parent level transaction volumes increased +13.6% YoY. JSMR consolidated toll and other operating revenue reached IDR 13.78 trillion, up +17% YoY in 2022FY, while for 4Q2022 JSMR toll and other operating revenue grew +1.5% YoY to IDR 3.58 trillion. JSMR’s subsidiaries booked +18.8% YoY growth to IDR 3.32 trillion and the parent company booked +14.4% YoY growth to IDR 9.12 trillion.
- JSMR plans to add more toll roads in Java such as Patimban (37.5km), Kediri – Kertosono (20.3km), Probolinggo – Besuki (49.88km), Yogyakarta – Banyurejo (8.8km), and Kartasura – Purwomartini (42.38km) in the next three years.
- With tariff adjustments in 2022 and expecting more volume growth for 2023, we are targeting JSMR toll and other operating revenues to grow +12% YoY to IDR 15.5 trillion.
4Q2022: one-off gains from divestment
- JSMR booked triple-digit growth in bottom line profit with a higher margin in 4Q2022 including a one-off gain from the divestment of MBZ toll road of IDR 2.2 trillion.
- JSMR’s 4Q2022 net profit had triple digit growth of +100% YoY or +541% QoQ to IDR 1.7 trillion. This resulted in a higher NPM of 48.8% in 4Q2022 from 7.6% in 3Q2022. For 2022FY, net profit reached IDR 1.61 trillion or +70% YoY growth.
- JSMR booked higher salary costs from paying bonus and other incentives that had been deferred since 2020, while the gain from divestment of MBZ toll road boosted operating income by +156.1% QoQ or +52% YoY to to IDR 3.2 trillion.
- JSMR booked EBITDA of IDR 8.68 trillion with +13.1% YoY growth in 2022, and management targeting EBITDA to grow >10% in 2023 with toll revenue growth in the range of 10%-15% growth.
Valuation: TP 5,440, Maintain BUY
- Our target for JSMR share price is IDR 5,440, offering investors a potential return of 62%, we maintain our recommendation to BUY. This would translate to a 2024F PE of 18x.
