Robust traffic
Traffic volume reached 100.9mn vehicles in June 2012. This translates into 3.4mn vehicles per day (+2.5% mom). Compared to May 2012, the traffic volume in June 2012 was 0.8% mom lower as a result of fewer operating days. All in all, we continue to believe that the traffic volume shall improve, unaffected by the weaker global economic conditions. Cumulatively, traffic volume reached 583.0mn vehicles in 1H12, or up 11.7% yoy, and translating into 3.2mn cars per day. The 1H12 traffic volume is 52.1% of our full-year forecast. For 2H12, traffic volumes may be lower on the back of the one-week Lebaran holidays which will reduce traffic on the inner-city toll road. Hopefully, however, this will be somewhat offset by increased traffic on toll-roads out of Jakarta.
BORR records strong growth
The Bogor Ring Road (BORR) is a great success story despite the complexities of developing the second stage. Daily traffic on BORR has already reached almost 30,000 vehicles a day, above the threshold volume to decide whether to go ahead with the second stage. In two and a half years, traffic volume has surged a rapid 70% CAGR, justifying the development of the second stage. Nonetheless, there are some issues to face since development of the second stage shall require good coordination with the local government. For the second stage development which is expected to cost Rp340.8bn and take 17 months to complete, JSMR has appointed WIKA as the main contractor. Construction begins this month.
Eyeing the Batang Semarang toll road section
The concession holder of the Batang Semarang toll road section, PT Marga Setiapuritama, has been warned by the toll road authority body to seek new investors after Bakrie Toll Road withdrew from the project. Jasa Marga has expressed interest in the section since it will connect to its current Semarang Solo toll road. However, the company has not disclosed information on whether it plans any further action. In our view, Jasa Marga has the financial capacity to participate in this project. Nonetheless, the financial feasibility of the project will be the main issue as the investment cost has ballooned to Rp7.2tn from Rp3.6tn previously. This section is 75km long and is part of the Trans Java Toll road.
Maintain BUY
Jasa Marga's traffic volume remains strong and unaffected by the global economic weakness. Going forward, the prospects for this business look good overall. Maintain BUY on the stock with a Target Price of Rp6,100.
No comments:
Post a Comment