TransJamaican Highway Limited Prospectus and Analysis

TransJamaican Highway (TJH) developed, operates, and maintains the Highway 2000 East-West toll roads. Highway 2000 East-West is a 49.9km tolled motorway with two distinct corridors: between Kingston and May Pen, and between Portmore and Kingston.

Company Overview

TransJamaican Highway (TJH) developed, operates, and maintains the Highway 2000 East-West toll roads. Highway 2000 East-West is a 49.9km tolled motorway with two distinct corridors: between Kingston and May Pen, and between Portmore and Kingston. The company, as concessionaire, operates the Highway 2000 East-West under a concession agreement signed November 2001 (amended and restated 28 January 2011) and on 29 January 2020, granted by National Road Operating & Construction Company (NROCC) the concession Agreement. The concession is for a period of 35 years, with 17 years remaining to expiry.

At a total cost to date of approximately US$1.3 billion, Highway 2000 remains the largest infrastructure project ever implemented in Jamaica. Highway 2000 East-West was the first toll road to be built and operated in Jamaica and was effective in shortening the commute between Kingston and May Pen and Kingston and Portmore. The Government of Jamaica (GOJ), through NROCC, a state-owned entity, purchased 100% of the ordinary shares in TransJamaican Highway in December 2019. These shares are now being offered to the general public by way of listing on the Jamaica Stock Exchange (JSE).

Recommendation

Jamaicans have been presented with the opportunity to own a piece of a large cas generating infrastructure i.e. the toll via this Initial Public Offering (IPO). Favourably, TransJamaican has seen consistent growth in revenue for the last five (5) years. Outside of toll increases, revenue is expected to further grow, coinciding with increases in traffic. Using an independent traffic consultant (Steer), it is projected that traffic for Highway 2000 East-West will increase year over year (YoY) over the period 2020-2036.

We note as per the concession agreement, the company has the first right of refusal to maintain, operate and/or own the May Pen to Williamsfield leg of Highway 2000. This signifies an additional 28km that TransJamaican could be operate. The company has also indicated that they may pursue opportunities to design, develop and manage crucial infrastructure projects both locally and regionally.

We are of the view that this as an excellent asset to include in one’s investment portfolio for diversification purposes, particularly those who seeks consistent dividend income and has long term investment objectives. Based on the opportunity highlighted, as well as the discounted offer price of J$1.41, we are recommending a BUY.

Check out full Analysis here.

Check out full Prospectus here.