BNIS INVESTMENT NOTE

PT Jasa Marga (Persero) Tbk (JSMR)

INDONESIA
A n a l y s t : Maxi Liesyaputra

Equity

September 30th, 2016

Toll road

maxi@bnisecuri es.co.id

Long-term performance escala on

JSMRs prole
PT Jasa Marga (Persero) Tbk (JSMR) is the largest toll road company in Indonesia, with 26 toll road concessions, having built the
Jagorawi (Jakarta-Bogor-Ciawi): Indonesias first operational toll
road commenced operations in 1978. JSMR has a 62% market
share of domestic toll roads, with the majority located in urban
concentrations, such as Greater Jakarta and West Java. In expanding its area of coverage, JSMR also operates the Belmera
(Belawan-Medan-Tanjung Morawa) toll road (42.7 km length) in
Sumatra and the Nusa Dua-Ngurah Rai-Benoa (10 km length)
facility in Bali. In 2015, the average daily traffic volume transaction was 3.78 million cars, or 80% of toll road operators total
daily transactions in Indonesia. The company has 13 new projects in the pipeline, working in stages since 2009. The highest
revenue contributor is the Jakarta-Cikampek toll road, with revenue CAGR of 8.3% over the period of 2012-2015.

What is the Latest Issue?

Improving 1H16 performance
JSMR posted toll and other operating revenues of Rp 4.2 trillion
in 1H16, improved by 15.8% YoY. Jakarta Cikampek toll road
was the largest contributor, with 14.2% of total tolls and other
operating revenues. Among the highest growth was Cikampek
Padalarang, with 27.0% YoY, to Rp 484.2 billion in 1H16, followed by JORR Seksi Non S, with growth of 26.8% YoY to Rp 496
billion. The highest growth was posted by Pondok Aren Bintaro Viaduct Ulujami, with 33.3% YoY to Rp 77 billion, but this
contribution was only 1.8% to total tolls and other operating
revenues.

BUY
TP: IDR 6,800
Vola lity Risk : HIGH

Stock Data
Current Price

Rp 4,710

52wk Range

Rp 4,5006,175

YTD % Change

-9.86

Share Outstanding

6.8 Bn

Market Capitaliza on

IDR 32.0 tn

Floa ng Rate

30.0%

1 Year Total Return

-1.60%

Beta

1.053

Major Shareholders
Government of Republic of Indonesia

70%

35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
-5.00%
-10.00%
-15.00%

Operating profit soared by 21.8% YoY to Rp 2 trillion on the back

of tolls and other operating revenues, which rose just 9.1% YoY
to Rp 1.9 trillion, lower than toll revenue growth. On the bottom
line, JSMRs net profit improved significantly, by 44.0% YoY to
Rp 925.5 billion in 1H16.

JSMR

JCI

JAKINFR

7,000
6,500
6,000

TP:
TP: Rp
Rp 6,800
6,800

5,500
5,000
4,500
4,000
3,500
3,000

PT BNI Securi es - Research Division

Maxi Liesyaputra
maxi@bnisecuri es.co.id

Catalyst
Rights issue approval
Following approval by the Parliament of government capital (PMN) disbursement, JSMR also secured
shareholder approval for conducting a rights issue, at the 29 August 2016 EGM. Shareholders attending
the meeting approved issuance of a maximum of 491.5 million new shares, at a par value of Rp 500 per
share. The company expects to have additional capital of Rp 1.8 trillion (PMN of Rp 1.25 trillion) from
rights issue proceeds.
We believe that the additional capital will be a positive catalyst for JSMR in support of its continuing expansion. JSMR is a capital-intensive company related to its new toll road expansion and development. On
the other hand, room for external financing is also greater, along with the additional capital.

Recommenda on
Recommenda on: BUY with TP of Rp 6,800 per share
Related to its continuing toll road expansion, we still hold a positive view on JSMR for the long-term, as it
controls the domestic toll road industry, with a market share of 61%, or 593 km of total domestic toll road
length. Locations are principally in Java, where congestion makes toll roads more attractive and costeffective for all drivers.
Toll traffic continues to grow, amid a slowdown in car sales. In 2015, JSMR toll road traffic increased by
just 4.6% YoY, to 1.375 billion vehicles, compared to a domestic car sales decline of 16.1% YoY to 1 million
units. We believe that the demand for toll roads will steadily increase despite fluctuating economic conditions in Indonesia, as they follow the increase of required domestic transportation. JSMR is traded with
forward 2016 PER and PBV of 18.2x and 2.3x, respectively. We set a target price (TP) of Rp 6,800 for JSMR.
Our recommendation is BUY.
Exhibit 1. JSMR toll traffic vs. national car sales
mn vehicles
1,400
1,380
1,360
1,340
1,320
1,300
1,280
1,260
1,240
1,220
1,200
1,180

thousand units
1,375

1,229
1,208
1,314

1,250

1,013

2013

2014
Traffic

1,300
1,250
1,200
1,150
1,100
1,050
1,000
950
900
850
800

2015

National car sales

Source: JSMR, processed by BNIS Research

KEY POINTS
Details of government capital (PMN)

The Parliament approved government capital (PMN) disbursement of

Rp 1.25 trillion for JSMR, following which JSMR is to conduct a rights
issue, issuing a maximum of 491.5 million new shares at a par value of
Rp 500 per share. JSMR will secure total rights issue proceeds of Rp 1.8
trillion, with public shareholders portion is in amount of Rp 535 billion.
The rights issue ratio is not yet to be determined from three (3) options.
JSMR will use the IPO proceeds for business expansion. The largest portion will be for the Semarang Batang toll road (50%) and Pandaan
Malang, with 30%. Both toll roads are expected to commence operations in 2019. The remaining proceeds of 20% will be for Jakarta
Cikampek II (Jatiasih Sadang). Awarding of the project is targeted for
2017 with construction to start up in 2018. JSMR has the right to match
Jakarta- Cikampek II since the company is the initiator of the project.
Exhibit 2. Usage of rights issue proceeds

20%
Semarang - Batang toll
road
50%

30%

Pandaan - Malang toll

road
Jakarta - Cikampek II toll
road

Source: JSMR, processed by BNIS Research

Escalating
mance

1H16

perfor-

JSMR succeeded in improving the companys toll road and other operating revenues of 15.8% Yoy to Rp 4.2 trillion in 1H16, supported by
traffic growth of 5.6% YoY to 704.1 million vehicles and toll tariff hike
in November 2015 for almost all toll road routes. Operating profit improved relatively higher, by 22.2% YoY, to Rp 2 trillion, along with a
higher margin to 46.7% in 1H16 compared to 44.2% in 1H15. Meanwhile, general and administrative expenses increased significantly, by
9.9% YoY to Rp 443.4 billion in 1H16.
Below the operating line, finance costs soared by 10.2% YoY to Rp
744.9 billion in 1H16. Tax expense declined by 6.4% YoY to Rp 334.9
billion, on the back of deferred tax of Rp 59.1 billion in 1H16. Therefore, the company was able to post significant net profit improvement
of 44% YoY to Rp 925.5 billion in 1H16. Net margin also improved sub3

KEY POINTS
Exhibit 3. Operating and net income margins
47%

47%

47%

23%
22%

46%

21%

46%

20%

45%
45%
44%

19%

44%

18%

18%

44%

17%

43%

16%

43%

15%
1H15
Operating margin

Well-diversified
stream

revenue

22%

1H16
Net income margin

To support its performance growth over the long-term, JSMR is in a

development stage for 17 new toll road projects, with loca ons mainly
in Java, on the back of feasible routes and severely congested trac. In
2016, JSMR has already won 4 new toll road tender concessions: Semarang Batang (45-year concession), Pandaan Malang (35 yearconcession), Balikpapan Samarinda in East Kalimantan and Manado
Bitung in North Sulawesi (40-year concession each). Other than those
two toll roads, JSMR is also working on Medan Kuala Namu Tebing
Tinggi toll road in North Sumatra for non-Java island toll roads.
In 2017, JSMR expects to have an addi onal 300 km of new toll roads
which will improve its revenue. Among the incoming new toll roads in
2017 are Perbarakan Tebing Tinggi (consis ng of 5 sec ons) with total length of 43.9 km, Solo-Ngawi (90.1 km), Ngawi Kertosono (87.0
km), Cengkareng Kunciran (14.2 km) and Kunciran Serpong (11.2
km).
We note that JSMR has already had a long-term view on poten al
trac in non-Java areas, as it develops toll roads in major ci es in Sumatra, Kalimantan and Sulawesi, all expected to enjoy accelerated regional growth, in line with the con nuing domes c economic growth
over a long-term perspec ve.

KEY POINTS
Exhibit 4. Incoming new toll roads in 2017
No.

Routes
1 Sala ga-Boyolali
2 Sepanjang-WRR
3 WRR-Driyorejo
4 Driyorejo-Krian
5 Gempol-Rembang
6 Rembang-Pasuruan
7 Cengkareng-Kunciran
8 Kunciran-Serpong
9 Medan-Kualanamu-Tebing Tinggi
10 Solo-Ngawi
11 Ngawi-Kertosono
Total

Length (km)
24.40
4.30
5.10
6.10
13.93
8.10
14.20
11.20
61.70
90.10
87.02
326.15

Source: JSMR, processed by BNIS Research

Initiator on new Jakarta

Cikampek toll roads

The existing Jakarta Cikampek toll road, as the largest revenue contributor is currently very congested. In response, JSMR has the initiative to construct new Jakarta Cikampek toll road, consisting of an elevated Jakarta Cikampek (Cikunir Karawang) with length of 36.84 km
and Jakarta Cikampek II (Jatiasih- Sadang). Since JSMR was appointed
as the initiator, the company has the right to match both projects.

Government support for

land acquisition

Land acquisition is an important issue for toll road business expansion.

The government is responsible for carrying out acquisition. As a toll
road operator, JSMR pays the agreed price once the government has
acquired all of the land required to develop one section. The action can
not be partially implemented.

Attractive dividend player

JSMR consistently pays dividends to its shareholders, despite the company always requiring a high investment for supporting its business
expansion. Over the period of 2011 -2015, the average dividend payout
ratio was relatively attractive, at 38.2%.

KEY POINTS
Exhibit 5. Dividend payout ratio
55%

52.0%

50%
45%

44.4%
40.0%

40%
34.6%

35%
30%
25%

20.0%

20%
15%
10%
2011

2012

2013

2014

2015

Source: Bloomberg, JSMR, processed by BNIS Research

Valuation

We set valuation for JSMR by using the DCF method, WACC of 8.5%,
which arrives at a target price (TP) of Rp 6,800 per share. Our TP has
44.4% upside potential from JSMRs stock closing price of Rp 4,710 per
share as of September 29, 2016. We hold a positive view for JSMR in
generating future revenues, underpinned by rising toll demand and
improving transportation connectivity in the country. Despite the high
investment required to support its expansion, the company will have
positive performance growth on the back of toll tariff hikes every two
years, and the commencement of operations of new toll roads. JSMR is
actively participating in toll road tenders held by the Indonesian Toll
Road Authority (BPJT) for enhancing its performance.
JSMRs position as the market leader in the domestic toll road industry
will benefit the company as it participates in any project tender, since
JSMR has much longer experience and manages more toll roads than
any other toll road operator in Indonesia. In order to increase its services, JSMR is still optimizing e-toll card usage to shrink line-ups at the
toll gate. We revise up our FY16 net profit forecast to Rp 1.85 trillion
from a previous net profit of Rp 1.64 trillion, due to better-thanexpected 1H16 net profit result.
The incoming equity addition from the rights issue proceeds will
strengthen JSMRs equity substantially, along with larger room for external funding. As a capital intensive company, JSMR requires a major
investment for supporting its business expansion. JSMR is traded at
forward 2016 PER and PBV of 18.2x and 2.3x respectively. Our recommendation for the stock is BUY, which is supported by its prospective
future business in toll road as in growing demand.

Key Figures
Figure 1. JSMR's toll road revenue contribution (1H16)

Figure 2. JSMR market share June 2016

Jakarta-Cikampek
14.2%

CikampekPadalarang

22.3%

39%

JORR seksi Non S

11.5%

JSMR

4.2%
4.7%
5.6%

Cawang-TomangPluit

11.8%

Others
61%

Jakarta-Bogor-Ciawi
6.8%
8.1%

10.8%
Jakarta-Tangerang

Source: Company

Source: Company

Figure 3. Revenue vs interest expense 2011 - 2015

Figure 4. Traffic growth

IDR billion

IDR billion
8,000
7,500
7,000
6,500
6,000
5,500
5,000
4,500
4,000
3,500
3,000

1,500
1,400
1,300
1,200
1,100
1,000
900
800
700
600
500
2011

2012

2013

Revenue

2014

2015

mn vehicles
710

704.1

700
690
680
666.8

670
660
650
640

Interest expense

1H15

1H16

Source: Company

Source: Company

Figure 5. Net debt to equity ratio 2011 - 1H16

Figure 6. Net margin 2011 - 1H16

30%

1.40

1.29

1.30

25%

27.8%
23.9%
22.0%

1.20
1.06

1.10

1.08

20%

1.00

1.00

19.2%

2014

2015

16.2%
15%

0.90
0.80
0.70

19.6%

0.66

0.69

10%

0.60

5%

0.50
0.40
2011
Source: Company

2012

2013

2014

2015

1H16

0%
2011

2012

2013

1H16

Source: Company

Summary of Financials
Income statement (Rp billion)

Toll and other business revenue

Operating profit
Interest expense
Pretax income
Minority interest
Net income
Basic EPS
EBITDA

Balance sheet (Rp billion)

2013
5,802.73
2,037.89
(715.09)
1,310.62
98.50
1,027.27
143.75
2,679.40

2014
7,227.79
3,072.56
(1,215.30)
1,850.56
184.70
1,421.66
198.93
3,199.83

2015
7,630.70
3,477.70
(1,405.00)
2,068.40
147.20
1,466.50
205.21
4,264.25

2016E
8,506.32
4,048.08
(1,369.44)
2,674.30
164.07
1,853.37
259.34
4,919.63

2017E
9,502.06
4,484.97
(1,382.94)
3,097.65
182.94
2,165.43
303.01
5,441.52

2013
Cash
3,514.06
Short-term investment
6.63
Accounts receivable
177.20
Other current assets
90.42
Total current assets
3,788.31
Toll concession rights and others 21,959.60
Total Assets
28,064.35
Liabilities and Shareholders' Equity
Accounts payable
100.00
Short-term borrowings
1,857.20
Other short-term liabilities
2,914.07
Total Current Liabilities
4,871.27
Long-term borrowings
10,464.57
Other long-term liabilities
2,539.83
Total Long-Term Liabilities
13,004.41
Total Liabilities
17,875.68
Minority interest
1,559.60
Total Equity
8,629.69

Cash flow (Rp billion)

2014

2015

2016E

2017E

1,027.27 1,421.66 1,466.50

641.51
127.27
786.55
(666.63) (2,948.52) (2,117.45)
1,675.53
248.75 2,524.08

1,853.37 2,165.43
871.55
956.55
(1,715.39) (1,600.10)
3,270.14 4,080.55

Cash flow from investing activities

Capital expenditure
(4,222.20) (2,219.50) (3,250.00)
Cash flow from investing activities (4,222.20) (2,219.50) (3,250.00)

(3,250.00) (3,250.00)
(3,250.00) (3,250.00)

Cash flow from financing activities

Dividends paid
Change in borrowings
Cash flow from financing activities
Net changes in cash

(640.84) (410.91) (568.66)

1,907.56 1,167.30 1,290.57
1,758.24 1,747.35
758.96
(788.43) (223.40)
33.04

(586.60)
878.61
459.62
479.76

Cash at beginning of the year

Cash at the end of the year

4,302.38 3,514.06 3,290.78

3,514.06 3,290.78 3,323.20

3,323.20 3,802.97
3,802.97 4,379.07

1H15
1H16
3,639.35 4,214.20
1,608.67 1,959.08
642.91
925.51
94.55
136.10

1Q16
2Q16
2,049.02 2,165.18
978.46
980.62
408.50
517.01
60.08
76.02

Revenue (Rp billion)

Revenue growth (YoY)
Operating expense/revenue
Net income (Rp billion)
EPS (Rp/share)
EPS growth
Dividend per share (Rp)
Dividend yield
Total Equity (Rp billion)
Total Assets (Rp billion)
EBITDA margin
Operating margin
Net income margin
Current ratio (x)
Debt to assets (x)
Net debt to equity (x)
DER (x)
PER (x)
PBV (x)
PEG (x)

(741.35)
300.00
(254.45)
576.11

Interim result (Rp billion)

Revenue
Operating profit
Net income
EPS (Rp)
Operating margin
Net margin

2015
3,323.20
7.00
164.40
234.50
3,729.10
24,864.70
36,724.85

2016E
5,602.96
7.70
233.49
236.47
6,080.62
28,649.73
42,118.99

2017E
6,179.07
8.47
260.33
260.74
6,708.61
30,913.90
44,607.45

182.10
863.06
3,255.82
4,300.97
12,629.27
3,909.06
16,538.33
20,839.31
1,560.60
9,460.10

137.50
2,762.80
4,843.45
7,743.75
11,974.40
4,638.32
16,612.72
24,356.47
1,950.20
10,418.55

93.39
1,301.77
5,791.26
7,186.43
14,330.41
4,669.45
18,999.86
26,186.29
2,114.27
13,818.42

104.13
1,319.78
6,072.59
7,496.50
14,630.41
4,940.82
19,571.23
27,067.73
2,297.21
15,242.50

2014
7,227.79
24.6%
61.3%
1,421.66
198.93
38.4%
60.43
1.3%
9,460.10
31,859.99
44.3%
42.5%
19.7%
0.82
0.65
1.06
2.20
23.68
3.39
0.62

2015
7,630.70
5.6%
57.7%
1,466.50
205.21
3.2%
83.63
1.8%
10,418.55
36,724.85
55.9%
45.6%
19.2%
0.48
0.66
1.08
2.34
22.95
3.07
7.28

2016E
8,506.32
11.5%
52.5%
1,853.37
259.34
26.4%
86.26
1.8%
13,818.42
42,118.99
57.8%
47.6%
21.8%
0.85
0.62
0.71
1.90
18.16
2.32
0.69

2017E
9,502.06
11.7%
52.8%
2,165.43
303.01
16.8%
109.02
2.3%
15,242.50
44,607.45
57.3%
47.2%
22.8%
0.89
0.61
0.63
1.78
15.54
2.10
0.92

Key Ratio Analysis

2013

Cash flow from operating activities

Net income
Depreciation & amortization
Others
Cash flow from operations

2014
3,290.78
7.14
48.09
199.80
3,545.82
23,941.40
31,859.99

2013
5,802.73
4.0%
67.9%
1,027.27
143.75
-39.0%
94.24
2.0%
8,629.69
28,064.35
46.2%
35.1%
17.7%
0.78
0.64
1.00
2.07
32.77
3.71
na

Capital history

44.20%
17.7%

46.49%
22.0%

yoy
15.80%
21.78%
43.96%

47.75%
19.9%

QoQ
5.67%
0.22%
26.56%

Date
12-Nov-07

IPO @ Rp 1,700

45.29%
23.9%

Source: Company, BNIS estimate

MAIN OFFICE - JAKARTA

PT BNI SECURITIES
Sudirman Plaza, Indofood Tower 16th Floor, Jl. Jend. Sudirman Kav. 76-78
Jakarta 12910, Indonesia
Phone: (62-21) 25543946 (Hun ng)
Fax: (62-21) 57935831
e-mail: bnisec@bnisecuri es.co.id (General)
JAKARTA - Mangga Dua

MALANG

Pertokoan Mangga Dua Blok E4 No. 7

Jl. Buring No. 58 Malang

Phone: (62-341) 321214, 321213, 341430
Fax: (62-341) 356876
e-mail: malang@bnisecuri es.co.id

Jl. Mangga Dua, Jakarta Utara

Phone: (62-21) 6123804/5
Fax: (62-21) 6123806
e-mail: manggadua@bnisecuri es.co.id

DENPASAR

JAKARTA - Wisma 46

Pertokoan Diponegoro Megah Blok. A5-A6, Lt. 2

Jl. Diponegoro No. 100 Denpasar - Bali
Phone: (62-361) 264376
Fax: (62-361) 229170
e-mail: denpasar@bnisecuri es.co.id

Wisma BNI 46 Lantai 31 Kota BNI

Jl.Jend Sudirman Kav.1 Jakarta 10220
Phone: 021- 2515266
Fax.021-5749837
e-mail: wisma46@bnisecuri es.co.id

MEDAN

JAKARTA - Puri Indah

Jl. Pemuda No. 12

Phone: (62-61) 4579616
Fax: (62-61) 4579656
e-mail: medan@bnisecuri es.co.id

Puri Niaga 3 Blok M8 No. 1B

Puri Kembangan, Jakarta Barat
Phone: (62-21) 58357464
Fax: (62-21) 58357465
e-mail: puriindah@bnisecuri es.co.id

PALEMBANG
BANDUNG

Jl. Jend. Sudirman No. 132, Kotak Pos 165 PLG

Phone: (62-711) 3619662
Fax: (62-711) 3619663
e-mail: plb@bnisecuri es.co.id

Jl. Perin s Kemerdekaan No. 3

Phone: (62-22) 4213375
Fax: (62-22) 4213376
e-mail: bdg_pk@bnisecuri es.co.id

PEKANBARU
YOGYAKARTA

BNI Cabang Pasar Pusat

Jl.Jend Sudirman No.365 Pekanbaru 28282
Phone: (62-761) 46757, 839698
Fax: (62-761) 856279
e-mail: pekanbaru@bnisecuri es.co.id

Gedung BNI, Jl. Laksda Adi Sucipto No.137

Phone: (62-274) 581001
Fax: (62-274) 584023
e-mail: yogya@bnisecuri es.co.id

SEMARANG

SOLO

Thamrin Square Blok B5

Jl.MH Thamrin No.5 Semarang
Phone: (62-24) 3566414-5, 64126413-7
Fax: (62-24) 3581713
e-mail: bnissmg@bnisecuri es.co.id

Jl. Slamet Riyadi No. 348

Phone: (62-271) 729667
Fax: (62-271) 729668
e-mail: solo@bnisecuri es.co.id

SURABAYA

ACEH

Jl. Pemuda No. 36

Phone: (62-31) 5320912
Fax: (62-31) 5318425
e-mail: surabaya@bnisecuri es.co.id

Jl.KH Akhmad Dahlan No.111 Lt.2

Banda Aceh
Phone: (62-651) 31109
Fax: (62-651) 31107

JAMBI

BANJARMASIN

Gd. BNI Cabang Jambi

Jl. Dr. Soetomo No 20
Phone: (62-741) 34100
Fax: (62-651) 34104
e-mail: jambi@bnisecuri es.co.id

Gd. Bank BNI Antasari Lt. 2

Jl. Pangeran Antasari No. 44 RT 008, Banjarmasin
Phone: (62-511) 3253735
Fax: (62-651) 3253754
e-mail: banjarmasin@bnisecuri es.co.id

DISCLAIMER
This document is not intended to be an oer, or a sa sfac on of an oer, to buy or sell relevant securi es (i.e. securi es men oned herein or of
the same issuer and op ons, warrants or rights to or interest in any such securi es). The informa on and opinions contained in this document
have been compiled from or arrived at in good faith from sources believed to be reliable. No representa on or warranty, expressed or implied, is
made by BNI SECURITIES or any other member of the BNI Group, including any other member of the BNI Group from whom this document may
be received, as to the accuracy or completeness of the informa on contained herein. All opinions and es mates in this report cons tute our judgment as of this date and are subject to change without no ce.