CIMB Jasa Marga Result note - Smooth highway

(JSMR IJ / JSMR.JK, OUTPERFORM - Maintained, Rp2,075 - Tgt. Rp2,600, Transport Infrastructure)

Above expectation; Maintain Outperform. Jasa Marga 1Q10 result was 28-33% above our expectation (potentially 21-25% above consensus) as the company saw lower toll operational expenses, boosting its margin to 60%. On the back of this, we revised up our earnings for FY10-12 by 10-18%, assuming EBITDA margin will average at 56% for FY10 (from previous forecast of 53%). We maintain our Outperform recommendation on Jasa Marga betting on infrastructure story as we expect more good news from the Government's investment regulation and the potential acceleration thereafter. We adjust our target price to Rp2,600 (from Rp2,500), still based on DCF (WACC 11.7-12.9%), on the back of earnings upgrade.