TRIM COMPANY FOCUS. Express Trasindo Utama One and Only. BUY - Rp1,800. Aug 21, Company Update. Stock Data. Major Shareholders: Consensus

Transcription

1 TRIM COMPANY FOCUS Express Trasindo Utama One and Only Aug 21, 213 TAXI is the second largest taxi operator in Indonesia, managing 825 taxi units at 212. Its biggest fleet serviced Jakarta, and a smaller contingent operated in Surabaya,Semarang and Medan BUY - Rp1,8 Company Update Share Price Rp1,36 Sector Transportation Price Target Rp1,8 (+32%) Prev. TP - Stock Data Reuters Code TAXI.JK Bloomberg Code TAXI.IJ Issued Shares (m) 2,146 Mkt Cap (Rpbn) 2,918 Average Daily T/O (m) Wk range Rp1,79 / Rp56 Major Shareholders: PT. Rajawali korpora 51.% Public 49.% Consensus EPS 13E 14F Consensus (Rp) TRIM VS Cons (%) 1.2 Stock Price Robust demand due to increasing middle class TAXI, as the first taxi company to become public in Indonesia, will benefit on the growth prospects of Indonesia s rise of the middle class as we estimate the demand to remain robust driven by strong GDP growth in 213 (+6% YoY). Subsequently, TAXI is well positioned to achieve its potential growth as the company has the second largest market share in Indonesia (1.2% in 211 and operated in Jakarta, Surabaya, Semarang, and Medan), and followed by strong demand in taxi ridership (18.2% CAGR in F from 12.3% CAGR in ). Hereinafter,TAXI has benefited from the lack of reliable rapid mass transportation operation and still focus on developing its regular taxi fleets which gave the biggest contribution to its revenues (88% of its revenues). TAXI targets to increase 2K fleets in 213 to 1K. The company already holds 3.5K unutilized license for its fleet expansion in Furthermore, due to Jakarta administration new fares rule, TAXI has set new flag rate to Rp6K, waiting fee Rp36K, and travelling rates at Rp3K/km. Regular taxi fleets remains to be the main revenues contributor for the company TAXI has a unique business scheme that allows driver to purchase the taxi after 6-7 years with initial security deposits of Rp7.5mn and give a fixed tariff fee of Rp235K with Rp4K collected on a daily basis as contribution towards maintenances reserve. On the other hand, we note that the recent fuel price hike does not affect the company s operating margin as fuel costs are borned by the driver. Hence, we estimate TAXI revenues to grow by 45% and reach Rp755bn in 213 with revenue from its regular taxi fleets as the main revenue contributor (88%of its total revenues). Furthermore, we target TAXI s revenue from regular taxi fleets to reach Rp655bn (+33%YoY) and Rp864bn (+3%YoY) in 213E and 214F, respectively. To note, we apply these revenue growth assumption based on the growth in the number of taxis which would reach 17K in 215. Valuation We estimate TAXI s EBITDA margin expansion trend to continue in 213 since increased costs coming from the fuel price hike is borned by the driver. Subsequently, we expect the company to book net profit of Rp122bn(+54%YoY) in 213 and Rp179bn(+47%YoY) in 214. We set our DCF based (WACC: 11.96%, TG: 3%) target price (TP) at Rp1,8 which implies 213 PE of 32x and 214 PE of 15x. We put a BUY recommendation on TAXI due to 32% potential upside on the counter. Forecast & Rating Year end Dec E 214F 215F 1,8 1,6 1,4 1,2 1, /25/212 9/25/212 11/25/212 Volume 1/25/213 3/25/213 Price 5/25/213 7/25/213 2,, 18,, 16,, 14,, 12,, 1,, 8,, 6,, 4,, 2,, - Revenue (Rpbn) ,276 Net Profit (Rpmn) EPS (Rp) EPS growth (%) BVPS (Rp) P/E (x) Div Yield (%) Muhamad Makky Dyah Dandytra Mardiasih makky.dandytra@trimegah.com dyah.mardiasih@trimegah.com

2 Number of motorized vehicles is ± 5.5mn, consist of 98% private vehicles serving 44% trips and 2% public transport vehicles serving 56% trips (July 211) Figure 1. The need of a reliable public transportation in Jakarta Private Vehicles 98% Public Transport Vehicles 2% Private Vehicles, 44% Public Transport Vehicles, 56%, The local government of DKI Jakarta Indonesia has a large untapped market potential compared to other country in South East Asia e.g: Singapore and Malaysia Figure 2. Taxi transportation untapped market potential as of FY211 Taxi per 1 people in SEA Singapore 5.2 Malaysia 3.12 Indonesia In absolute size, the number of Indonesian middle class is expected to roughly double within 1 years, from 45mn to 85mn in 22E Figure 3. Increasing middle class in Indonesia Below consuming class 135 Consuming class (5-6% GDP Scenario) 23 in (7% GDP Scenario), Mckinsey Report 2

3 Taxi ridership grew 13% CAGR in and it is estimated to rise 17% CAGR in E due to increased in passengers demand Figure 4. Taxi Demand E Demand (taxi ridership in mn) (mn) E 214E 215E 216E While taxi supply has shown an increase of 7% CAGR in and it is estimated to have CAGR of 14% in E Figure 5. Taxi Supply E ('s) Supply (taxi fleet size in 's) E 214E 215E 216E TAXI has the second largest market share in Indonesia at 1.2% Figure 6. Competitive Landscape % of 211 fleet-indonesia taxi market Company Y 3.% Company X 8.% Express 1.2% Blue Bird 28.% % 5% 1% 15% 2% 25% 3% 3

4 Currently, TAXI is focusing to expand its business in regular taxi fleets and target to operate 1K in 213 from only 2K in 27 Figure 7. Increasing Regular Taxi Fleets since ,2 4 4,922 3, ,35 Regular Taxi Fleet Size 1, E TAXI has been operated in strategically located business operations such as Jakarta, Medan, and Semarang, and expected strong growth in tourist areas like Bali and Lombok Figure 8. TAXI operating location Medan Greater Jakarta Semarang Bandung Surabaya Bali Lombok The government has set new taxi tariff in June 213, and TAXI has set new flag rate to Rp6K, waiting fee Rp36K, and travelling rates at Rp3K/km Figure 9. Express and Blue Bird Old and New Tariff Blue Bird Express Old Tariffs New Tarrifs Old tarrifs New Tarrifs Flagship down 6, 7, 5, 6, Waiting Fee 3, 42, 25, 3, Travelling Rate 3, 3,6 2,5 3, 4

5 A taxi driver earns a gross income of USD45.91per day and 22% of the income goes to the loan payment, 11% goes to the company for management fees, 4% goes to the car maintenance saving fund, and 3% goes to cost of fuel. The rest (17%) are the driver s net income Figure 1. Drivers daily income vs expenses Fuel cost Net income Maintenance Fees Management Fee Loan payment Meals Loan payment, 22% Management Fee, 11% Meals, 16% Fuel cost, 3% Net income, 17% Maintenance Fees, 4% Source: UNDP research, Company The company has been changing its business model since inception in 1989, due to driver s lack of responsibility and shifting market demands. Figure 11. The evolution of the Express Taxi Business Model Source: TRIM research, UNDP research - Easy business model make a strong recurring and stable cash flow Figure 12. Simple cash flow based on the company s business scheme Revenue _ Operating Cost = EBITDA _ Based on fixed tariff (Rp235K) x No. Of fleets Corporate & SGA expenses Free Cash Flow Interest expenses/ Capex _ Interest / debt repayment and Capex Working Minimal working capital requirements Capital 5

6 We expect TAXI to have Rp1.2tr revenues in 215F due to the increase in regular taxi fleet Figure 13. TAXI s revenue F 215F 214F 982 Revenue (Rpbn) E 755 (Rpbn) Revenue from regular taxi is the main contributor of TAXI s revenue in 213 (88%), followed by revenue from Value Added Transportation business (VATB, 8%) Figure 14. TAXI s revenue breakdown in 213 VATB, 8% Regular Taxi, 88% Repairs, maintenance, and spare parts is the largest component in the TAXI s operating expense in 213F (44%). Subsequently, along with the fleet expansion, we predict an increase of 1%YoY in repair, maintenance, and spare parts in 213F Figure 15. TAXI s cost breakdown in 213 Other, 19% KIR and licences, 13% Salaries and allowances, 24% Repairs, maintenance, and spareparts, 44% 6

7 We expect EBITDA to grow by 26% CAGR in F and to reach Rp926bn in 215F Figure 16. TAXI s EBITDA F (Rpbn) EBITDA E 214F 215F 926 TAXI s net income grew by 347% CAGR in period, nevertheless we expect a more steady growth of 33% CAGR in F and to book net income of Rp187bn in FY15F. Figure 17. TAXI s Net Income F (Rpbn) Net Income E 214F 215F 7

8 Income Statement (Rpbn) Year end 31 Dec E 214F 215F Revenue ,276 % Growth Gross Profit Op. Profit EBITDA % Growth Net Int Inc / (Exp) (54) (75) (93) (16) (122) Other inc / (exp) (57) (78) (34) (44) (57) Pretax Profit Tax (22) (28) (28) (28) (28) Minority Interest Extra Items Net Profit % Growth Balance Sheet (Rpbn) Year end 31 Dec E 214F 215F Cash and Deposits Other Current Assets Net Fixed Assets 799 1,162 1,23 1,248 1,298 Other Assets Total Assets 999 1,782 2,136 2,563 3,116 ST Debt Other Curr. Liabilities LT Debt Other LT Liabiities Minority Interest Total Liabilities 791 1,96 1,328 1,573 1,869 Shareholder's Equity ,247 Net Debt / (cash) Net Working Capital (21) 245 (71) (92) (12) Cash Flow (Rpbn) Year end 31 Dec E 214F 215F Net Profit Depr / Amort Others - 18 (17) Change in Opr Ass&Liab - (284) 333 (13) (17) CF's from Oprs 157 (42) Capex (376) (458) (189) (211) (235) Others CF's from Investing - (434) (121) (178) (193) Net Change in Debt Others ,56 CF's from Financing 616 1,248 1,23 1,176 1,353 Net Cash Flow ,563 1,538 1,965 Cash at BoY Cash at EoY Free Cash Flow (55) Key Ratio Analysis Year end 31 Dec E 214F 215F Profitability Gross Margins (%) Op Margins (%) EBITDA Margin (%) Net Margins (%) ROE (%) ROA(%) Stability Current Ratio (x) Net Debt / Equity (x) Int Coverage (x) Efficiency A/P Days A/R Days Total Asset Turnover Interim Result (Rpbn) Capital History 4Q11 1Q12 2Q12 3Q12 4Q12 Date Sales Gross Profit Operating Profit Net Profit Gross Margins (%) Opr Margins (%) Net Margins (%) Nov-12 Rp56 8

9 PT Trimegah Securities Tbk 18th Fl, Artha Graha Building Jl. Jend. Sudirman Kav Jakarta 1219, INDONESIA Tel : (6221) Fax : (6221) DISCLAIMER This report has been prepared by PT Trimegah Securities Tbk on behalf of itself and its affiliated companies and is provided for information purposes only. Under no circumstances is it to be used or considered as an offer to sell, or a solicitation of any offer to buy. This report has been produced independently and the forecasts, opinions and expectations contained herein are entirely those of Trimegah Securities. While all reasonable care has been taken to ensure that information contained herein is not untrue or misleading at the time of publication, Trimegah Securities makes no representation as to its accuracy or completeness and it should not be relied upon as such. This report is provided solely for the information of clients of Trimegah Securities who are expected to make their own investment decisions without reliance on this report. Neither Trimegah Securities nor any officer or employee of Trimegah Securities accept any liability whatsoever for any direct or consequential loss arising from any use of this report or its contents. Trimegah Securities and/or persons connected with it may have acted upon or used the information herein contained, or the research or analysis on which it is based, before publication. Trimegah Securities may in future participate in an offering of the company s equity securities.