Valuation
In arriving at a one-year price target for TJH, we employed a discounted cash flow model based on a forecast of the Group’s Free Cash Flow to Equity from FY 2025 to FY 2036. In this regard, we made modifications to the long-term revenue forecast that management had provided during the IPO, with the most notable change being an upgrade in traffic growth, given the Group’s better-than-expected revenue performance. Additionally, we ensured the incorporation of cost savings resulting from the new ownership structure with the acquisition of JIO, which will lead to significantly lower operating costs.
With an estimated cost of equity of 10.71%, we determined a price target of $4.48 within the next year, compared to the offer price of $3.60. This represents an upside potential of approximately 24.31%. Please note that this analysis does not include the potential impact of the concession agreement for the Phase 1C leg of the highway, pending further clarity on the traffic profile and expected cost structure. Combining this with the relatively attractive dividend yield of approximately 5.1%, we recommend that investors, particularly institutions interested in substantial volume PARTICIPATE in the offer for sale and we reiterate an OVERWEIGHT recommendation in TJH.
| Action | Participate |
| Last Closing Price | Positive |
| General Public Offer Price | $3.60/$0.0228 |
| 52 Week High (J$/US$) | 4.98/0.0299 |
| 52 Week Low (J$/US$) | $3.02/0.0185 |
| YTD Return (J$/US$) | -17.71%/-18.8% |
| Price Target | J$4.48 |
| Potential Upside | 24.4% |
| Offer Dividend Yield | 5.3% |
| Offer P/E | 9.1x |
| Recommendation | OVERWEIGHT |
Date: March 6, 2025
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