Jasa Marga: Prof.Dr.Sedjiatmo increase its tariff by 10% to Rp5,500/car effective today (JSMR, Rp5,650, Buy, TP: Rp6,100)
· Starting today new tariffs are imposed in Prof.Dr.Sedjiatmo (14.3Km) toll road. Tariff for passenger car (vehicle type 1) up by 10% to Rp5,500/car vs. previously Rp5,000/car. The implementation of new tariff is slightly delayed from the original schedule on Jul, since the latest rate increase was Jul 12, 2010. In FY11A the toll road reached 66.5mn traffic, contributed 6.1% to JSMR’s traffic.
· Meanwhile, tariff increase in Jakarta-Cikampek (83.0Km) toll road, which should have the same schedule with Prod.Dr.Sedjiatmo, has been delayed as the toll road failed to meet the minimum service standards requirements from BPJT. However, JSMR expects the increase tariff would be applied before the Eid –al Fitr (19-20 Aug) holiday, considering this toll road is one of the most traffic during the festive season. In FY11A traffic in the toll road reached 176.4mn traffic, contributed 16.2% to JSMR’s traffic.
· We just update our TP to Rp6,100/share (previously Rp5,700/share) as we rolled over our DCF valuation to next year, while our forecast and assumptions remains unchanged. Our new TP implies to PER12-13F of 24.2-20.8x. A full note company focus report is available for more details. We maintain a buy recommendation on JSMR.