JSMR
Contact our analyst Eka
36% potential return, BUY
27th May 2022
Price Rp 3740
Target price Rp5100
27th May 2022
Price Rp 3740
Target price Rp5100
Higher volume and revenue
Transjava Toll Roads spin off and IPO plans
Higher 1Q2022 Profit
Valuation: TP 5,100, Maintain BUY
- Mobility is growing again leading to an increase in toll transaction volume and revenue.
- JSMR transaction volume increased +14% YoY in 1Q2022 with JSMR’s subsidiary toll road transaction volume increasing +44.6% YoY and JSMR’s branch transaction volume increasing +10% YoY. JSMR consolidated toll revenue reached IDR 2.93 trillion, up +15.6% YoY in 1Q2022 due to tariff adjustments and higher transaction volume, while subsidiaries booked +26.2% growth to IDR 787 billion and the parent level booked +12.2% growth to IDR 2.15 trillion.
- Transactions and revenue reached a peak in mid December with a 22% increase compared to normal conditions. In April 2022, JSMR’s consolidated revenue is 26% higher compared to normal conditions due to the national holiday and an improved covid-19 situation.
- We expect the higher volume of transactions will continue in 2022F and JSMR toll and other operating revenue will grow +15% YoY to IDR 13.55 trillion.
Transjava Toll Roads spin off and IPO plans
- JSMR plans to spin off 4 operating toll roads and 9 share ownerships in the Tranjava toll road to PT Jasamarga Transjawa Tol (JTT) in July 2022. JTT will be managed by JSMR and own Jakarta – Cikampek to Banyuwangi toll roads with a total length of 866 km or 73% of the total 1,184 km. The length of the operating toll roads that will be spun off is 676 km.
- JSMR has received approval from the Minister of SOE in March 2022 for the spin off and after the transaction is completed, JTT will conduct an IPO in 1Q2023.
Higher 1Q2022 Profit
- JSMR recorded a net profit of IDR 392.8 billion in the 1Q2022, +143% YoY (but down -55% QoQ) due to a decrease in interest expenses of -20% and gains from divesting toll roads. The quarterly decrease is due to seasonality after the Holiday and Christmas in December.
- EBITDA increased +12.7% YoY to IDR 2.17 trillion and the EBITDA margin increased to 68%.
- We expect better 2022 traffic volume and revenue, with a net profit target of IDR 1.8 trillion which is growth of +16% YoY.
Valuation: TP 5,100, Maintain BUY
- Our target for JSMR share price is IDR 5,100, offering investors a potential return of 36%, we maintain our recommendation to BUY. This would translate to a 2023F PE of 18x.