Sarina has just written a report on Jasa Marga (JSMR IJ), the country’s largest toll road operator in Indonesia. We increase our profit forecasts by ~10-17% for 2010-12, on the back of higher margin assumptions.
The stock is trading at 13.4x PER11CL. Our TP is also increased to Rp2,950/sh, implying 15x PER11CL.
The company has almost a de facto monopoly in the toll road business in the country. With vehicle sales going very strong in Indonesia, we are only going to see more traffic (some toll roads are congested on the daily basis). No issue with the top lines.
As such, the key factors that determine short-medium term margins are (1) cost of capital and (2) overall cost management. And it seems like things are going really well for JSMR on these two fronts. We expect further margin expansion.
(1) Declining cost of capital. JSMR has a bond of Rp650bn expiring Dec2010, which carries a 16.15% coupon. We believe this can be refinanced at a lower cost (we expect single digit rates). If we lower our cost of capital to 11% (from 14.5% previously), the equity value per share of the company (DCF derived) will come to be Rp4,578/sh vs Rp3,071/sh now.
(2) Better than expected cost management as JSMR pushes forward with its cost management, and the e-toll system. EBITDA margin expanded to 65.6% in 2Q10, the highest in their history. Margins have expanded steadily in the past four years. About 20% of JSMR’s workforces are outsourced.
Tampilkan postingan dengan label Jasa Marga (JSMR IJ). Tampilkan semua postingan
Tampilkan postingan dengan label Jasa Marga (JSMR IJ). Tampilkan semua postingan
Kamis, 29 Juli 2010
Kamis, 12 Februari 2009
CLSA Jasa Marga (JSMR IJ)
Jasa Marga (JSMR IJ)
Our analyst Hadi has prepared a note on Jasa Marga (JSMR IJ) which presented at our Vegas forum yesterday (note attached). We believe Jasa Marga is still on track with its operational targets for 2009-10 (see below).
Feedback from the Forum
JSMR is planning to build 5 new toll roads, linked to their existing ones (existing =500km), totalling 140km over the next 4 years (increasing total length by 28%)
In addition it may buy out some existing toll roads owned by private operators that could add another 40 plus km.
JSMR believes they have no competition in winning new projects because of the experience derived from their 30 year track record.
Long term business prospects are indeed bright as the government has no money thus they rely heavily on toll road operators for new road building.
JSMR's debt is rated AA minus by Pefindo (Indonesia's credit rating agency) thus it has strong access to the domestic bond market. It has no need to refinance until 2011.
Our analyst Hadi has prepared a note on Jasa Marga (JSMR IJ) which presented at our Vegas forum yesterday (note attached). We believe Jasa Marga is still on track with its operational targets for 2009-10 (see below).
Feedback from the Forum
JSMR is planning to build 5 new toll roads, linked to their existing ones (existing =500km), totalling 140km over the next 4 years (increasing total length by 28%)
In addition it may buy out some existing toll roads owned by private operators that could add another 40 plus km.
JSMR believes they have no competition in winning new projects because of the experience derived from their 30 year track record.
Long term business prospects are indeed bright as the government has no money thus they rely heavily on toll road operators for new road building.
JSMR's debt is rated AA minus by Pefindo (Indonesia's credit rating agency) thus it has strong access to the domestic bond market. It has no need to refinance until 2011.
Langganan:
Postingan (Atom)