JSMR
Contact our analyst Eka
Massive toll road opportunities that require huge funding. 16.5% potential upside. Hold.
17th January 2018
Price Rp6,350
Target price Rp7,400
17th January 2018
Price Rp6,350
Target price Rp7,400
Boost from Infrastructure
New Concession Rights
New Funding Push
TP 7,400, 16.5% Upside. HOLD
- This year JSMR plans to do an IPO of its 65% owned subsidiary, PT Jasamarga Transjawa Tol.
- We estimate toll and other operating revenue in 2018F will reach IDR. 9.8 trillion double digit growth from our estimate in 2017F of IDR. 9.09 trillion.
- While revenue from construction in 2018 will reach IDR. 18.57 trillion from massive toll road development. We are expecting a high sustainable total revenue growth rate CAGR (2014-2018F) of 32%.
New Concession Rights
- In January 2018, JSMR got new concessions, South Jakarta-Cikampek & Probolinggo-Banyuwangi.
- With these, JSMR has 1,497 km of total concession rights. & there are more still in the tender progress & JSMR has a big chance to win them.
New Funding Push
- For 2018, JSMR is allocating capital expenditure worth IDR. 70 trillion, IDR 43 trillion non cash and IDR. 27 trillion from cash.
- To cover capital expenditure, in 2018 JSMR plans to do corporate actions such as offering JSMR bonds & raising money through subsidiaries IPO.
TP 7,400, 16.5% Upside. HOLD
- We have a one year target price for JSMR, using a DCF valuation with WACC at 6.65%, of IDR. 7,400.
- This offers investors a potential return of 16.5% & would mean the stock trading at 21.8x 2018F PE.
- We recommend HOLD.