Jasa Marga(JSMR IJ) Equity Research Results Note BUY. Monday,30 April 2018

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1 Equity Research Results Note Monday,30 April 2018 BUY Maintain Last price (IDR) 4,210 Target Price (IDR) 5,300 Upside/Downside +25.9% Previous Target Price (IDR) 5,300 Stock Statistics Sector Bloomberg Ticker Toll Road JSMR IJ No of Shrs (mn) 7,258 Mkt. Cap (IDRbn/USDmn) 30,556/2,199 Avg. daily T/O (IDRbn/USDmn) 49.5/3.6 Major shareholders (%) Government 70.0 Public 30.0 Estimated free float 30.0 EPS Consensus (IDR) 2018F 2019F 2020F Danareksa Consensus Danareksa/Cons (14.6) (14.7) 9.7 JSMR relative to JCI Index Jasa Marga(JSMR IJ) Solid earnings JSMR booked 1Q18 earnings of IDR583bn, up 6.5%yoy, supported by 11.2%yoy growth in revenues from toll roads and other operating revenues. The result is 33.5% of our full year forecast and 30.6% of consensus estimates. This is higher than the average past two year s rate of 24.2%. We maintain our forecast given the expected operation of several new toll roads this year. JSMR booked 1Q18 earnings of IDR583bn. (+6.5%yoy, 1Q17: IDR547bn) reaching 33.5% of our FY target and 30.6% of consensus estimates. This is higher than the average past two-year s rate of 24.2%. Our earnings forecast is conservative as it mainly reflects the expected operation of new toll roads this year. In 2018, JSMR expects to operate ~300km of new toll roads. Revenues reached IDR2.4tn. (+11.2%yoy, 1Q17: IDR2.1tn). This includes IDR2.2tn of revenues from toll roads (+12.6%yoy, IDR2.0tn). The Jakarta Cikampek toll road is still the main contributor to toll road revenues with a contribution reaching 13.5%, followed by Cipularang (11.2%), and JORR Section Non-S (11.1%). The other 17 sections contributed less than 10% each. Total interest bearing debts as of Mar18 reached IDR32.4tn, or flat compared to the level as of Dec17. Hence, interest expenses in 1Q18 were flat compared to the previous year at ~IDR444bn. The DER as of Mar18 stood at 1.71x, slightly lower than 1.77x in Dec 17 on the back of higher equity. Seeks to operate ~300km of new toll roads in JSMR hopes to operate ~337km of new toll roads this year including the Solo-Ngawi section (90km) and the Ngawi Kertosono section (87km) whose operation had been delayed from the initial target in Both toll roads are targeted to start operation before the Lebaran holidays in the middle of the year. In the process of issuing a mutual fund. JSMR plans to obtain fresh funds through the divestment of some of its shares in three subsidiaries in which JSMR owns 60% stakes. The subsidiaries hold the concessions for Semarang Batang (75Km), Solo Ngawi (90km), and Ngawi Kertosono (87Km). The divestments will be packaged in a mutual fund called RDPT. JSMR has already conducted pre-marketing for the new instrument and is awaiting approval from the Financial Services Authority (OJK). Maintain BUY. We maintain our forecast and recommendation, noting that several new toll roads will start to be operated this year. Source : Bloomberg x Maria Renata (62-21) ext.3513 maria.renata@danareksa.com Key Financials Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Revenue (IDRbn) 8,832 8,922 9,678 10,628 11,865 EBITDA (IDRbn) 3,035 3,328 3,113 3,121 3,546 EBITDA Growth (%) (6.5) Net profit (IDRbn) 1,889 2,200 1,742 1,825 1,963 EPS (IDR) EPS growth (%) (20.8) BVPS (IDR) 2, , , , ,602.6 DPS (IDR) PER (x) PBV (x) Dividend yield (%) EV/EBITDA (x) Source : JSMR, Danareksa Estimates See important disclosure at the back of this report 1

2 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 Exhibit 1. Revenues and Growth Exhibit 2. Net Profits and Growth Exhibit 3. Margins Exhibit 4. Gearing Level Exhibit 6. PE Band Chart Exhibit 7. PBV Band Chart SD: 40.2x +1SD: 32.9x Avg.:25.6x -1SD: 18.3x -2SD: 10.9x 12,000 10,000 8,000 6,000 4,000 2, x 27.0x 22.0x 17.0x 12.0x See important disclosure at the back of this report 2

3 Exhibit 8. 1Q18 Result Summary QoQ YoY 1Q18/ Cons. 1Q18/ IDR Bn 1Q17 4Q17 Chg 1Q18 Chg FY18F FY18F FY18F Cons. % % % % Revenues 4,996 12,020 (19.8) 9, , na na Toll road rev. 2,140 2,857 (16.7) 2, , , Gross profit 1,224 1, , , na na Op. profit 1,014 1, , , , Net profit , , GPM (%) na OPM (%) NPM (%) (1.1) Source: Company, Bloomberg, Danaresksa Sekuritas estimates See important disclosure at the back of this report 3

4 Exhibit 9. Income Statement Revenue 8,832 8,922 9,678 10,628 11,865 COGS (4,023) (3,772) (4,208) (4,725) (5,329) Gross profit 4,809 5,150 5,469 5,903 6,536 EBITDA 3,035 3,328 3,113 3,121 3,546 Oper. profit 3,907 4,155 4,243 4,504 5,022 Interest income Interest expense (1,509) (1,269) (1,925) (2,259) (2,460) Forex Gain/(Loss) Income From Assoc. Co s (7) (129) (148) (170) (196) Other Income (Expenses) Pre-tax profit 2,650 3,250 2,170 2,076 2,367 Income tax (847) (1,157) (858) (682) (669) Minority interest Net profit 1,889 2,200 1,742 1,825 1,963 Core Net Profit 1,889 2,200 1,742 1,825 1,963 Exhibit 10. Balance Sheet Cash & cash equivalent 4,125 6,873 3,006 1,324 1,467 Receivables 8,279 11,547 9,238 7,390 5,173 Inventory Other Curr. Asset Fixed assets - Net 885 1,036 1,128 1,195 1,238 Other non-curr.asset 39,650 59,170 71,587 79,630 86,099 Total asset 53,500 79,193 85,443 89,959 94,344 ST Debt 9,904 3,341 4,849 9,975 5,640 Payables 1,414 1,640 5,086 2,802 3,440 Other Curr. Liabilities 7,308 20,017 14,922 13,407 12,920 Long Term Debt 15,153 29,132 35,208 37,343 44,614 Other LT. Liabilities 3,382 6,704 5,619 5,011 4,500 Total Liabilities 37,161 60,833 65,684 68,538 71,114 Shareholder'sFunds 13,679 15,098 16,171 17,474 18,889 Minority interests 2,660 3,262 3,588 3,947 4,341 Total Equity & Liabilities 53,500 79,193 85,443 89,959 94,344 See important disclosure at the back of this report 4

5 Exhibit 11. Cash Flow Net income 1,889 2,200 1,742 1,825 1,963 Depreciation and Amort ,130 1,383 1,476 Change in Working Capital (6,304) 8, (2,656) 2,147 OtherOper. Cash Flow 5,935 7,624 1,490 2,376 2,184 Operating Cash Flow 2,393 19,215 4,435 2,928 7,771 Capex (10,682) (22,233) (14,282) (9,882) (8,300) Others Inv. Cash Flow 268 (305) Investing Cash Flow (10,414) (22,538) (13,881) (9,562) (8,044) Net change in debt 9,098 7,430 7,582 7,258 2,933 New Capital 1, Dividend payment (293) (567) (660) (523) (548) Other Fin. Cash Flow (1,635) (579) (1,342) (1,784) (1,970) Financing Cash Flow 8,942 6,284 5,579 4, Net Change in Cash 920 2,961 (3,867) (1,682) 143 Cash - begin of the year 3,323 4,125 6,873 3,006 1,324 Cash - end of the year 4,125 6,873 3,006 1,324 1,467 Exhibit 12. Key Ratios Year to 31 Dec 2016A 2017A 2018F 2019F 2020F Growth (%) Sales EBITDA (6.5) Operating profit Net profit (20.8) Profitability (%) Gross margin EBITDA margin Operating margin Net margin ROAA ROAE Leverage Net Gearing (x) Interest Coverage (x) Source : JSMR, Danareksa Estimates See important disclosure at the back of this report 5