NCB Capial Markets, lead broker of the Transjamaican Highway Limited (TJH) offer for sale, is recommending ‘participate’ to its client base and discerning investors, which opens today (March 4). 

In its customary research analysis, NCB Capital Markets forecasted up to 28.2 per cent total potential return with a target price of J$4.43 per share. The total return features a potential 22.9 per cent price appreciation, bolstered by a high dividend yield of 5.2 per cent at the offer price, suggesting the potential for continued steady income for investors in TJH.

Reinforcing its recommendation, the report shared an in-depth analysis of the company’s financial performance, infrastructure expansion strategy, and future revenue diversification initiatives. 

The report confirmed that TJH’s return on equity (ROE) of 54.8 per cent ranks among the highest in the region, relative to peers, reinforcing its strength as a top-performing toll operator while serving as a key indicator of its strong financial performance.

A comparison with other publicly listed toll-road operators in Latin America highlights TJH’s significant outperformance, with Autopistas Del Sol SA (Argentina) at -29.0 per cent and Aenza S.A.A. (Peru) at -1.7 per cent, while the regional peer group averaged a -8.3 per cent ROE. Additionally, TJH’s return on assets (ROA) of 10.7 per cent far exceeds the peer average of -5.3 per cent, further underscoring its efficiency in deploying capital to generate profits.

TJH’s financial results further reinforce its stability. Net income surged by 30.7 per cent to US$31.32 million, while toll revenue reached an all-time high of US$82.82 million (+10.1 per cent). TJH has also bolstered its ability to repay debts, improving its net debt-to-EBITDA ratio from 6.07x in 2022 to 3.08x in 2024.

Meanwhile, its current ratio, which doubled to 1.0x, and its reserve accounts demonstrate enhanced liquidity and financial resilience. 

NCB Capital Markets Limited’s analysis further highlights the depth of TransJamaican Highway’s ability to drive revenue growth through increasing traffic volumes.

In financial year 2023 (which is the latest data that is available), traffic transactions exceeded 27.1 million—marking a 12 per cent increase over pre-pandemic levels.

The company’s Spanish Town and May Pen toll plazas recorded significant growth, rising by 7.6 per cent and 14.1 per cent, respectively, reflecting the growing demand for efficient transport networks. The report further highlighted that the expansion of Highway 2000 Phase 1C, from May Pen to Williamsfield, is set to increase traffic volumes and revenue, further solidifying the company’s financial position.

A key focus for TJH is the modernisation of its tolling system. The company is reportedly targeting an 80 per cent per cent increase in T-Tag adoption over the next five years, which will reduce cash-handling costs, improve efficiency, and enhance the customer experience. The research analysis also highlighted that this transition towards digital tolling aligns TJH with global infrastructure trends, placing it at the forefront of regional toll road management. 

Beyond toll revenue, TJH is also diversifying its income streams. The company is reportedly leveraging its infrastructure by leasing fibre optic corridors to telecom companies, establishing a stable, recurring non-toll revenue source. Additionally, commercial development initiatives, including the construction of a RUBIS fuel station near the Portmore Toll Plaza, are part of a long-term strategy to monetise highway-adjacent land.

“TJH is positioning itself as a future-ready infrastructure company. Our investments in technology, infrastructure, and commercial ventures will drive sustained growth and long-term profitability,” said managing director Ivan Anderson.

As part of the company’s long-term growth plan, the analysis highlighted one of TJH’s most significant strategic advantages: its right of first refusal (ROFR) on future toll road developments in Jamaica. This exclusive right ensures that TJH has the first opportunity to expand its footprint if the government proceeds with additional toll road projects. The company has already exercised this right for Phase 1C and is well-positioned to expand further if Phase 2B (Williamsfield to Montego Bay) moves forward.

“TransJamaican Highway is not just a toll operator; it is a vital infrastructure asset with a clear growth trajectory,” said Christopher Buchanan, senior vice president of investment banking at NCB Capital Markets, who also spoke at the ‘Own Di Road’ webinar. 

Buchanan indicated that “the combination of strong profitability, a robust dividend policy, and strategic expansion plans makes TJH one of the most attractive investment opportunities on the market today.”  

He also highlighted that the offer for sale is priced at J$3.60 per share, 15 per cent below the recent trading highs of J$4.20—making it an attractive entry point for investors looking to capitalise on its long-term growth potential.

“This is not just about investing in a stock; it’s about owning a piece of Jamaica’s infrastructure future,” said Buchanan, noting that “TJH is a company with a clear growth strategy, strong financials, and a competitive edge in infrastructure expansion.”

The offer for sale includes 1.75 billion shares, with an option to increase by 750.3 million if demand exceeds supply. Some 40 per cent (700.28 million shares) are reserved for institutional investors, while 1.05 billion shares are open to the general public.

Investors seeking a strategic infrastructure investment are encouraged to review the prospectus, consult their financial advisors, and seize this opportunity before the window closes. The TransJamaican Highway offer for sale runs from March 4 to March 18, subject to the right for this time to be shortened or extended.