JSMR Nov2021

JSMR

Contact our analyst Eka

30% potential return, Maintain BUY
15th November 2021
Price Rp 4270
Target price Rp5550

Expecting higher volume in 4Q2021.

In 3Q2021, JSMR toll and other operating revenue increased +4.7% YoY to IDR 2.6 trillion while total transaction volume decreased -14.7% YoY to 230. million vehicle transactions due to the increases in Covid-19 cases since the end of June and the impact of the restrictions on social mobility.
As of 9M2021, JSMR’s total transaction volume increased +4.5% YoY to 758.6 million. JSMR recorded a toll and other operating revenue increase of 21% YoY to IDR 8.2 trillion.
We expect a higher volume of transactions in 4Q2021 as since September 2021 mobility started to increase and this continued into October 2021 due to the easing of PPKM to level 1.
The traffic and revenue recovered from negative -38% in July to 8% in September. Traffic even reached +12% above normal conditions in early October and was stable until the end of October.

9M2021: Margin Increased

In 3Q2021, JSMR recorded a net loss of IDR -106.2 billion which is a decrease of -304% YoY after significant growth in 2Q2021. The decrease in 3Q2021 is due to the increases in Covid-19 cases since the end of June and the impact of restrictions on social mobility.
For 9M2021, JSMR’s net income still recorded +375.5% growth to IDR 749.4 billion. NPM increased to 9% from 2% in 9M2020.
Operating income also increased +36% YoY to IDR 4.6 trillion in 9M2021 with a higher operating margin of 56% from 50%.
EBITDA increased +29.4% YoY to IDR 5.37 trillion and the EBITDA margin increased to 65% from 61%.
As we expect better 4Q2021 traffic volume and revenue, we expect 2021 revenue to reach IDR 11.6 trillion or 21% YoY growth. JSMR’s net profit will reach IDR 1.0 trillion or +101% YoY growth.

Valuation: TP 5,550, Maintain BUY

Our target for JSMR share price is IDR 5,550, offering investors a potential return of 30%, we maintain our recommendation to BUY. This would translate to a 2022F PE of 29x. Buy.