JSMR Oct2022

JSMR

Contact our analyst Eka

61% potential Upside, BUY
3rd October 2022
Price Rp 3240
Target price Rp5230

Traffic Returned to Normal

Mobility has returned to normal without any restrictions, leading to an increase in toll transaction volume and revenue.
JSMR consolidated toll revenue reached IDR 6.65 trillion, up +17.8% YoY in 1H2022 due to tariff adjustments for three toll roads this year and higher transaction volume.
JSMR’s subsidiaries booked +25% growth to IDR 1.66 trillion and the parent company booked +13.1% growth to IDR 4.41 trillion.
JSMR transaction volume increased +15.6% YoY in 1H2022 with JSMR’s subsidiary toll road transaction volume increasing +33.2% YoY and JSMR’s parent level transaction volume increasing +11.2% YoY.
For 2Q2022, the volume of transactions was higher by +6% QoQ and +13% YoY due to the high traffic during the Lebaran holiday with Jakarta – Cikampek toll road having the highest volume traffic compared to the others toll roads. In 2Q2022, JSMR booked toll road revenue of IDR 3.46 trillion, higher by +8.2% QoQ and +19.7% YoY.
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.

Triple digit profit Growth

If we exclude gains from divestments of IDR 788.7 billion in 1H2021, JSMR’s bottom line profit in 1H2022 had triple digit growth of +998% YoY to IDR 734.7 billion. In the 2Q2022, JSMR profit reached IDR 341.9 billion from a loss in 2Q2021.
Operating profit also grew +9.4% YoY to IDR 2.93 trillion in 1H2022, and profit before tax also grew +295.7% YoY due to a decrease in interest expenses of -17%.
EBITDA increased +21.3% YoY to IDR 4.39 trillion and the EBITDA margin increased to 66.9%.
We expect better 2022 traffic volume and revenue, which gives a net profit target of IDR 1.89 trillion which is growth of +17% YoY.

Valuation: TP 5,230, Maintain BUY

Our target for JSMR share price is IDR 5,230, offering investors a potential return of 61%, we maintain our recommendation to BUY. This would translate to a 2023F PE of 17x.