Following the earlier surge in global oil prices amid heightened geopolitical tensions, the recent increase in Pertamax prices is expected to lift Indonesia's June inflation, potentially weighing on household purchasing power and mobility. As a result, we have become more cautious on JSMR's traffic outlook, as softer consumption is likely to limit traffic recovery despite the company's defensive toll road business.
 

Another headwind comes from the higher interest rate environment. With a significant portion of its debt linked to floating rates, JSMR is more exposed to rising financing costs, which are expected to put pressure on earnings over the next few quarters even as operating performance remains relatively resilient.

While we have lowered our earnings expectations to reflect these macro challenges, JSMR's cash flow should remain solid, supported by the stable and recurring nature of its toll road business. The company also continues to benefit from inflation-linked tariff adjustments, providing a natural cushion against rising operating costs over time.
 

Overall, we maintain our positive view on JSMR. We believe the recent share price weakness is largely driven by near-term macro concerns rather than any deterioration in the company's fundamentals, making the stock increasingly attractive for investors with a medium- to long-term investment horizon.