Jasa Marga BUY. February 2015 traffic: Moderating growth. Target Price, Rp 8,200

Transcription

1 Thursday, 19 March 2015 BUY Target Price, Rp 8,200 Upside 16% JSMR IJ/JSMR.JK Last Price, Rp 7,075 No. of shares (mn) 6,800 Market Cap, Rp bn 48,110 (US$ mn) 3,651 3M T/O, US$mn 3.3 Last Recommendation 27-Feb-15 BUY Rp8, Feb-15 BUY Rp8, Feb-15 BUY Rp7,600 JSMR relative to JCI Index Market Recommendation Danareksa vs. Consensus Our Cons % Diff Target Price, IDR 8,200 7,851 4 EPS 2015F, IDR PE 2015F, x TOLL ROADS/COMPANY UPDATE Jasa Marga February 2015 traffic: Moderating growth JSMR s February 2015 daily traffic only edged up 0.7%m-m/3.7%y-y to 3.58mn vehicles/day. As a result, the daily traffic growth in 2M15 moderated to 5.4%y-y with total traffic volume reaching 210mn vehicles, or 3.56mn vehicles/day. The early months of the year tend to see low volume, especially on the out-of-greater Jakarta sections. The eventual imposition of VAT on toll tariffs should have a positive impact on JSMR, we believe, given that tariffs will be rounded to the nearest Rp500, meaning that JSMR will enjoy a weighted average tariff increase of 1.5%, in our estimate. With rupiah volatility a matter of concern at the moment, we reiterate our BUY call, noting the counter s defensive characteristics given its zero dollar exposure. Traffic volume edged up 0.7%m-m/3.7%y-y in February 2015 In February 2015, JSMR only posted 0.7%m-m/3.7%y-y higher daily traffic to 3.58mn vehicles/day. Nonetheless, in 2M15, JSMR s traffic growth moderated to 5.4%y-y, yet still supported by some new sections operational in The Semarang-Solo and BORR sections, as well as JORR-W2N and its interconnections continue to be the engine of growth. As such, we maintain our FY15F traffic growth target of 4.9% (3.76mn vehicles/day). Higher traffic on out-of-greater Jakarta sections should be expected in 2H15F. VAT on toll tariffs is delayed; yet positive impact on JSMR when implemented In the latest turn of events, the imposition of a 10% VAT on toll tariffs will be delayed from 1 April 2015 even though the MoF s Directorate of Taxes already published the toll VAT regulation under PER-10/PJ/2015, which states that the VAT calculation is 10/110 from the rounded tariff. In our calculation, JSMR will enjoy +1.5% weighted average tariff increases from the Rp500 rounding of the tariffs post imposition of the VAT. Thus, we believe that when the policy is implemented, it will be positive for JSMR in the long-run despite a possible shock to traffic volume in the short-term. Hence, for this year, with the 10% VAT plus the biannual tariff increase on the majority of sections, toll road users might face 20-30% increases in tariffs. Expansion through acquisitions is also an option JSMR will continue its expansionary strategy to maintain traffic volume growth not only through participating in new toll road tenders but also by undertaking acquisitions of some halted toll road projects. Recently, JSMR proposed to acquire three new sections from PT Thiess Contractors Indonesia, namely in: Solo-Ngawi (91.9km), Ngawi- Kertosono (87.2km), and Cinere-Serpong (10.1km) with total investment of Rp11.2tn. Interestingly, for both the Solo-Ngawi and Ngawi-Kertosono sections, the government also participated through the VGF scheme as seen in the Medan-Kualanamu-Tebing Tinggi section to elevate the proposed IRR. For those sections, JSMR will partner with PT Waskita Toll Road. All in all, we are positive on the acquisitions, as JSMR always acquires toll sections that offer a minimal 15% IRR coupled with the fact that these sections will also support interconnection with JSMR s existing sections. Joko Sogie (62-21) jokos@danareksa.com Danareksa research reports are also available at Reuters Multex and First Call Direct and Bloomberg. Toll Revenues, Rp bn 5,803 6,646 7,329 8,316 9,181 EBITDA, Rp bn 3,058 3,583 3,953 4,678 4,937 EBITDA Growth, % (4.7) Net Profit, Rp bn 1,028 1,403 1,600 1,877 1,982 Core Profit, Rp bn 1,056 1,540 1,710 2,007 2,117 Core EPS, Rp Core EPS Growth, % (28.6) Net Gearing, % PER, x Core PER, x PBV, x EV/EBITDA, x Yield, %

2 Exhibit 1. JSMR s February 2015 traffic 2M14 2M15 y-y, % Feb-14 Jan-15 Feb-15 m-m, % y-y, % (Daily traffic, in '000) Jagorawi (0.6) 1.4 Jakarta Cikampek (0.1) 2.6 Jakarta Tangerang Camareng (0.6) (3.1) Purbaleunyi Surabaya Gempol Belmera (3.8) (0.8) (5.1) Semarang Palikanci (5.1) 18.2 JORR S & Non-S Ulujami-Pd. Aren (8.8) (11.1) BORR Semarang Solo Sumo Nusa Dua-Benoa JORR W2N TOTAL Daily traffic 3, , , , , TOTAL Volume 199, , , , ,151 (9.1) 3.7 Greater Jakarta 2, , , , , Out-of-Greater Jakarta Source: Company Exhibit 2. JSMR s traffic rose 3.7%y-y to 3.58mn vehicles/day in February 2015 Source: Company Exhibit 3. VAT impact on JSMR Section Current +10% New Tariff Chg, % 10% VAT JSMR JSMR Revenue (Rp) Tariff VAT (Rp500 Rounding) (10/110) Portion Chg, % weight, % Jakarta-Cikampek 4,000 4,400 4, , % Soedyatmo 6,000 6,600 6, ,909 (1.5) 7% BORR 5,500 6,050 6, ,455 (0.8) 1% Inner City 8,000 8,800 9, , % Jagorawi 3,000 3,300 3, , % Jakarta-Tangerang 5,000 5,500 5, ,000-7% Cipularang 34,000 37,400 37, ,409 34, % Padaleunyi 8,000 8,800 9, , % Surabaya-Gempol 3,000 3,300 3, , % Belmera 6,500 7,150 7, ,364 (2.1) 1% Semarang 2,000 2,200 2, ,818 (9.1) 2% Palikanci 5,000 5,500 5, ,000-2% JORR 8,500 9,350 9, , % Semarang-Solo 7,000 7,700 7, ,818 (2.6) 2% Nusa Dua-Benoa 10,000 11,000 11, ,000 10,000-2% Surabaya-Mojokerto 1,500 1,650 1, ,364 (9.1) 0% Simple average 9.7 (0.3) Weighted average

3 Exhibit 4. JSMR proposed to acquire three Thiess toll road concession Section Length, km VGF, km Investment, Rp bn Investor Signing Serpong-Cinere ,219 Cinere Serpong Jaya / Thiess 28-Jun-11 Solo-Ngawi ,138 Solo Ngawi Jaya / Thiess 28-Jun-11 Ngawi-Kertosono ,832 Ngawi Kertosono Jaya / Thiess 28-Jun-11 TOTAL ,189 Source: Company date 3

4 Exhibit 5. Profit and loss, Rp bn Toll Revenues 5,803 6,646 7,329 8,316 9,181 Others Operating Revenues 6,311 7,229 7,994 9,060 10,013 Toll collection 873 1,083 1,204 1,318 1,545 Service Maintenance 1,569 1,365 1,504 1,674 1,946 JO G&A 1,088 1,161 1,286 1,399 1,630 Operating Expenses 4,319 4,477 4,941 5,408 6,239 Operating Profit 1,992 2,752 3,053 3,652 3,774 EBITDA 3,058 3,583 3,953 4,678 4,937 Net Interests (715) (950) (852) (1,059) (1,061) Other Income (Expenses) (12) (5) Pre-tax Income 1,311 1,822 2,201 2,593 2,714 Income Tax & Minorities (283) (419) (601) (716) (732) Net Profit 1,028 1,403 1,600 1,877 1,982 Core Profit 1,056 1,540 1,710 2,007 2,117 Exhibit 6. Balance sheet, Rp bn Cash & Equivalent 3,514 3,291 2,778 2,876 2,656 Other Current Assets Total Current Assets 3,788 3,641 3,150 3,276 3,081 Fixed Assets -net 23,195 26,820 29,891 33,653 37,180 Other Non-current Assets 1,076 1,396 1,705 1,914 2,073 Total Non-current Assets 24,270 28,217 31,596 35,567 39,253 Total Assets 28,059 31,858 34,746 38,842 42,335 Short-term Debt 1, Trade Payables Other Current Liabilities 3,120 3,468 3,560 3,683 3,813 Total Current Liabilities 4,871 4,313 3,772 3,923 4,078 Long-term Debt 10,465 12,629 14,649 16,922 18,522 Other Non-current Liabilities 2,165 3,491 3,780 4,118 4,518 Total Non-current Liabilities 12,629 16,120 18,430 21,040 23,041 Total Liabilities 17,501 20,433 22,201 24,963 27,119 Shareholder's Equity 10,558 11,425 12,544 13,880 15,216 Total Liabilities and Equity 28,059 31,858 34,746 38,842 42,335 4

5 Exhibit 7. Cash flow, Rp bn Pre-tax 1,311 1,822 2,201 2,593 2,714 Minorities Depreciation 1, ,026 1,163 Tax (538) (435) (583) (689) (720) Working Capital (400) (455) (235) (110) (70) Operating Cash Flow 1,539 1,951 2,341 2,882 3,168 Capex (4,929) (4,456) (3,971) (4,787) (4,690) Investment (5) 7 (9) (9) (9) Others Investing Cash Flow (4,494) (4,014) (3,776) (4,557) (4,416) Debt 1,902 1,167 1,366 2,272 1,601 Equity 383 (2) (59) (62) (82) Dividend (641) (535) (421) (480) (563) Others 523 1, Financing Cash Flow 2,167 1, ,772 1,027 Changes in Cash (788) (223) (512) 98 (220) Exhibit 8. Key ratios Profitability, % Operating Margin EBITDA Margin Net Margin Core Margin ROAE ROAA Capitalization Debt to Equity, % Net Debt to Equity, % Interest Coverage, x Turnover, days Trade Receivables Inventories Trade Payables Growth, % Toll Revenues Operating Profit (23.4) EBITDA (4.7) Net Profit (35.9) Core Profit (28.6)

6 6