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Wednesday, May 18, 2011

Remarkable 1Q11 Result - PT Jasa Marga Tbk

by Lautandhana Securities 

Jasa Marga’s 1Q11 net profit surged by 27.4% YoY to Rp 373 billion vs Rp 292 billion in 1Q11, while its revenue also climbed by 13.8% YoY from Rp 1 trillion to Rp 1.2 trillion.

Jasa Marga also posted a remarkable profitability during the same period, where EBITDA and operating margin has improved by 364 bps and 102 bps to 60.9% and 52.1%, respectively.

Comments

The remarkable 1Q11 financial performance was boosted by traffic volume increase (+12.0% YoY), reaching 254 million vehicles in 1Q11 vs 227 million vehicles in 1Q10. We noted that the 1Q11 traffic volume was recorded at highest level in its history at the beginning year, thanks to better economic condition (i.e.: stable interest rate and the softening of inflation).  We also noted that 1Q11 automotive sales grew by 29.5% YoY achieved 225,413 units (vs 174,074 units in 1Q10) based on GAIKINDO’s data.

In all, the company’s 1Q11 results came in line with our projection, where we estimated FY11F revenue and net profit figures reached Rp 4.9 trillion and Rp 1.3 trillion, respectively.

Later this year, we foresee that traffic volume in 3Q11 will stagnate due to the seasonal Lebaran holiday (in August 2011), however, we believe that the company’s revenue will continue to improve on the back of the proposed toll road tariff increase for the remaining of 9 toll road sections (will be implemented in 3Q11).

In addition, the Government involvement through revolving fund and land capping schemes and its strong position as the largest toll road operator are the key catalyst for the company.

Recommendation

We maintain BUY rating for the counter with a fair value (based on DCF methodology) of Rp 4,250 per share. Currently, the counter is traded at PE of 17.77x FY11 and EV/EBITDA of 10.99x FY11 and our fair value still offered 24% upside.

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