JSMR
Contact our analyst Eka
34% potential Upside, BUY
September 5th 2024
Price Rp 5225
Target price Rp7000
September 5th 2024
Price Rp 5225
Target price Rp7000
Higher traffic and tariff adjustment
Q2 2024 Result: Impact of tariff adjustment and PMK 72
Valuation: TP 7,000, Maintain BUY
- Jasa Marga (JSMR) reported a significant increase in toll and operating revenues for Q2 2024, up by 36.3% YoY and 16.2% QoQ to IDR 4.89 trillion. This growth was driven by higher traffic volumes, tariff adjustments in 2023 and 2024, and the reconsolidation of three Trans Java toll roads.
- Traffic transactions increased by 2.05% in Q2 2024, with subsidiary toll roads seeing a 6.3% YoY rise, while the parent-level transactions grew slightly by 0.4% YoY.
- JSMR also adjusted tariffs on the Bali Mandara, Gempol–Pandaan, and Surabaya–Mojokerto toll roads, with further adjustments expected in Jakarta–Tangerang and Cawang–Pluit toll roads in 2H 2024.
- Management has raised the 2024 revenue target, expecting traffic volume growth to exceed 17%, supported by sustained traffic increases and further tariff adjustments. The revised revenue target for 2024 is IDR 18.26 trillion.
Q2 2024 Result: Impact of tariff adjustment and PMK 72
- JSMR’s net profit grew by 171% YoY or 200% QoQ to IDR 1.76 trillion in Q2 2024, driven by tariff adjustments, reconsolidation of key toll roads, and the impact of PMK 72. Excluding the overstated deferred tax liabilities, JSMR's core profit rose by 89% YoY to IDR 1.02 trillion, with a core net profit margin of 20.9%.
- The adjustment of PMK 72/2023 allows toll road amortization over 20 years or the actual useful life, extending to the end of the concession for new toll roads, which impacts deferred tax accounting. This led to an IDR 637 billion addition to deferred tax income, with deferred tax liabilities expected to decrease gradually. As of June 2024,
- JSMR's weighted average cost of debt (WACD) increased slightly to 6.71%, with a stable fixed-rate and floating-rate composition of 42% and 58%, respectively.
Valuation: TP 7,000, Maintain BUY
- Target Price and Recommendation: JSMR's target share price is set at IDR 7,000, implying a 2024F price-to-earnings (PE) ratio of 7.5x, offering a potential return of 34%. Based on these positive factors, our recommendation to BUY JSMR shares is maintained.
