Backed by increased traffic volume and cost efficiency, Jasa Marga recorded superior profitability for the 1H10 and quarterly period. All in all, the 1H10 figures were in line with the expectation, where the operating revenue and net profit has covered 49% and 59%, respectively. Supported by more transparent toll road regulations, we expect that operating revenue and net profit in FY10-FY11 will grow by 13.7% YoY-16.8% YoY and 7.4% YoY-21.6% YoY respectively. Our initiating coverage on Jasa Marga recommends BUY with fair value of Rp 3,000 per share, based on DCF-method.
The largest toll road operator
In 32 years, Jasa Marga has been transformed into the largest toll road operator in Indonesia which has managed and operated 531 km toll road or equivalent with 72% of the national toll road network. Jasa Marga is also the longest toll road concession holders in Asia which has owned remaining 34 years concession's right to operate its existing toll road and 41 years for its new toll road concessions.
1H10 Strong Result
Jasa Marga posted 23.6% YoY operating revenue increase which reached to Rp 2.1 trillion compare to the same previous periods last year of Rp 1.7 trillion, thanks to traffic volume hike of 3.3% YoY and additional revenue contribution from Bogor Ring Road Section I’s operation. Bottom line also jumped significantly by 63.7% YoY attained to Rp 648 billion. All in all, the 1H10 figures were inline with market consensus.
2Q10 higher profitability
Jasa Marga recorded 2Q10 superior profitability which was triggered by increased traffic volume (+5.1% QoQ) and the success of the company’s cost efficiency (mainly in labor cost). The operating and EBITDA margins have improved by 305 bps and 352 bps became 53.6% and 63.3% in 2Q10, respectively, while the company’s net margin also rose to 31.6% from 30.0% during the same period.
New toll roads projects ensure long-term growth
Jasa Marga has obtained 7 new toll road projects with total lengths of 189 km which are divided into 14 sections. Given the GoI involvement in land acquisition and the certainty of toll tariff incremental, we believe that the new toll roads will ensure the company’s long-term growth. We have computed the potential of additional revenue from its new projects into our financial model which are expected to contribute on average 8% to the toll road revenue during 2010F-2015F.
The regulation reforms to guarantee toll road investment
Under SBY’ government, the GoI has reformed several toll road regulations to guarantee the certainty of toll road business and support sustainable economic growth. The important from the changes of toll road regulations are land acquisition process and toll tariff incremental. The GoI involves in land acquisition process through the policy of land capping, while toll tariff will be adjusted every two years.
Initiating coverage with BUY recommendation
We forecast the company’s operating revenue and net profit in FY10-FY11 will grow by 13.7% YoY-16.8% YoY and 7.4% YoY-21.6% YoY which are backed by 1) toll road tariff’s increment in early July 2010; 2) several changing in toll road regulations; 3) Semarang-Ungaran and Waru-Sepanjang sections are scheduled to operate this year and 4) the plan of toll tariff increase in 2011. We initiate coverage on Jasa Marga with Buy recommendation and fair value of Rp 3,000/share, implies PE-PBV FY11F of 19.14x-2.67x. Our fair value is derived by DCF-method calculation with 10.80% WACC assumption, 3% terminal growth and 2011 as basic year. At yesterday closing price, our fair value offers 12% upside potential and the counter is traded at PE-PBV FY11F of 14.04x-2.19x.
Tidak ada komentar:
Posting Komentar