Company Overview
TransJamaican Highway Limited operates Jamaica’s East-West toll road network under a concession agreement extending until 2036, making it a cornerstone infrastructure asset with predictable cash flows tied to toll rates and traffic volumes.
Catalysts
- Traffic Growth: Continued urban development and highway expansions (e.g., Phase 1C) drive traffic volume increases.
- Toll Adjustments: Scheduled toll increases linked to inflation ensure steady revenue growth.
- Debt Refinancing: Reduced interest expenses improve profitability, reflected in higher net profit margins.
Risks
- Concession Renewal Uncertainty: Long-term risks exist if renewal terms beyond 2036 are unfavorable.
- Economic Sensitivity: Traffic volumes may decline during economic downturns, impacting revenue growth.
- Regulatory Risks: Changes in toll policies or government intervention could affect profitability.
Valuation Zone
Based on adjusted intrinsic value calculations (JMD $2–2.51/share), TJH currently trades slightly below its intrinsic value at JMD $1.80/share, offering modest upside potential for long-term investors seeking stable income-generating assets.
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