JSMR’s Net Profit is Distressed, Recommendation: Sell

Jasa Marga Tbk (JSMR)’s net profit on the period of 2016-2017 is estimated to drop to 1,35 trillion IDR and 1,1 trillion IDR compared to its previous net profit in 2015 worth 1,46 trillion IDR. The decrease in net profit is caused by the bailout funds for land acquisition worth 12 trillion IDR and the commencement of four toll road constructions.

Anggiasari, the Finance Director of JSMR, said that two toll roads which were in progress of land acquisition were Pandaan-Malang toll road along 37,6 km and Semarang-Batang toll road along 75 km. “JSMR’s cost increases because we gave the bailout funds for land acquisition worth 12 trillion IDR. Next year, JSMR’s profit will decrease more because we started the long investment,” said Anggiasari.

Besides these two toll roads, JSMR is joining tender for Cikampek Elevated toll road construction along 36,8 km. The three toll roads will be funded by the proceed of right issue that is estimated to reach 1,78 trillion IDR. After the land acquisition has finished, there will be four toll road contructions that will began soon, which are Semarang-Batang, Pandaan-Malang, Manado-Bitung, and Cikampek Elevated.

JP Morgan recommended SELL for JSMR with a target price of 4.700 IDR. In trading on Monday (29/8), JSMR share dropped by 0,7% to 4.990 IDR. (*)