JSMR Mar2024

JSMR

Contact our analyst Eka

37% potential Upside, BUY
14th March 2024
Price Rp 5250
Target price Rp7200

Boosted by Tariff Adjustment

JSMR saw a 27.9% increase in toll road revenue during Q4 2023, thanks to tariff adjustments for six additional toll roads and higher traffic volume transactions in Q4 2023.
For the full year 2023, JSMR's consolidated toll and operating revenue reached IDR 15.56 trillion, reflecting a year-over-year (YoY) growth of 12.9%. The total number of JSMR toll roads with tariff adjustments in 2023 reached 21 with various tariff increases.
In terms of traffic volume transactions, subsidiary toll road transaction volumes rose by 13.3% YoY, while parent-level transaction volumes grew by 3.8% YoY.
In Q4 2023, revenue growth continued with a YoY increase of 27.9% or 13.5% quarter-over-quarter (QoQ), reaching IDR 4.56 trillion, the highest revenue in 2023.
After adjusting tariffs for 21 toll roads, as of March 2024, JSMR will further adjust tariffs on the Jakarta – Cikampek toll road, including the Mohammed bin Zayed toll road. In January and February 2024, JSMR had already adjusted tariffs for the Kunciran – Cengkareng and Cinere – Serpong toll roads.
Traffic volume transactions in January were not much different compared to last year, but there was an increase in February due to the long weekend. We expect more spikes in traffic volume transactions to continue in April in line with the Eid holiday.
Based on sustained volume increases and tariff adjustments, our target for JSMR's toll and operating revenues is IDR 17.5 trillion in 2024F.

Triple-digit growth in core profit

JSMR recorded triple-digit growth in core profit of 198.7% YoY to IDR 2.69 trillion in 2023. Meanwhile, bottom-line profit reached IDR 6.79 trillion with a 147% YoY increase due to the implementation of tariff adjustments on 21 toll roads, re-consolidation of the Semarang – Batang, Solo – Ngawi, and Ngawi – Kertosono toll roads, and a decrease in financial expenses due to deconsolidation in the MBZ toll road and partial repayment of bonds in September 2023.
As a result, the core net profit margin (NPM) grew to 17.3% in 2023 from last year’s 6.5%.
For Q4 2023, JSMR's profit also recorded a double-digit growth of 12.8% QoQ to IDR 819 billion, the highest in 2023, with an NPM of 17.9%.

Valuation: TP 7,200, Maintain BUY

Our target share price for JSMR stands at IDR 7,200, resulting in a projected 2024F price-to-earnings (PE) ratio of 7.6x. This offers investors a potential return of 37%. Considering these factors, we maintain our recommendation to BUY JSMR shares.