Should you invest in TransJamaican Highway’s new offer?
So TransJamaican Highway is the company that owns and operates the East to West legs of Highway 2000. That’s from Kingston to Portmore, and Kingston to Mandeville. They make money by charging tolls.
The government, through the National Road Operating and Constructing Company, NROCC, sold 80 percent of its shares in TJH back in 2020. And now they’re selling the last 20-percent through an offer for sale on the stock exchange.
So, here are the details:
They’re selling one point seven five billion shares, with an option to upsize by an extra 750 million shares.
The share price is three dollars and 60 cents. That means if the offer is upsized and fully subscribed, it will raise nine billion Jamaican dollars or about 57 million USD.
Now, a week before this offer was announced, TJH closed at three dollars and 97 cents. So the offer price is a 9-percent discount. And if you consider TJH’s 52 week high of 4 dollars 98 cents, that’s almost a 30-percent discount.
The offer officially opens on March 4 and is scheduled to close on March 18.
According to the Prospectus, after paying off expenses, the Ministry of Finance will decide how the rest of the funds are used. But since these are not new shares being issued by TJH none of the funds will go to TJH.
Now let’s look at the company’s latest numbers.
TJH brought in almost 83 million US dollars in 2024 or about 13 billion JMD. In the fourth quarter alone, they made 22 million US.
That was mainly due to more traffic on the nation's highways. And the crazy part is, they haven’t even started collecting tolls from the May-Pen to Mandeville leg, which was completed in 2023.
If you look at their unaudited financial statements for December 2024, you see that they’ve been collecting more tolls and profit is rising.
The 2023 annual report also shows revenues growing each year.
As for dividends, TJH has been one of the best dividend paying companies on the JSE since its listing in 2020. According to the prospectus, they will continue to pursue this policy.
Finally, let’s look at the risk factors, because every investment has risk. Remember right after the IPO in 2020, COVID forced the country into lockdown for the better part of two years. So there was very little travelling. That’s why we see this dip here on the chart for 2020.
So there’s always the risk of another public health crisis and lockdown. Or weather events like Hurricane Beryl that limit travel. The company also relies on technology to operate the tolls, and we all know the risks that come with that. Plus, changes in tariffs could impact the company’s bottom line.
With all that said, bear in mind that this information is for educational purposes only, and is not intended as investment advice.
If you’re interested in this offer, you can apply via NCB’s goIPO platform or through JMMB’s MoneyLine.
Go to goipo.jncb.com to apply.