JSH 500US$ - Jardine Strategic cut to Hold from Buy by Citigroup

Stock Name: JSH 500US$
Company Name: JARDINE STRATEGIC HLDGS LTD
Research House: Citigroup

Citigroup has cut conglomerate Jardine Strategic (J37.SG) to Hold from Buy on expected earnings growth slowdown due to tougher on-year comparisons ahead, according to Dow Jones.



Citi notes Jardine Strategic’s 66% growth in 1H underlying profit “not surprising” given 1H09 one of weakest six-month periods in group’s recent history. In particular, expects Hongkong Land (H78.SG) business to “see negative rental reversions” in 2H10, 1H11.

But adds, not cutting rating to Sell due to stock’s 39% NAV discount. Raises target price to US$26.00 ($35.07) from US$20.00 on “operational improvement” seen “across the board,” increases FY10-12 EPS forecasts by 10.1%, 11.5%, 13.7%.



Research house notes JC&C (J37.SG) division star performer of group as stronger IDR boosted Astra (ASII.JK) earnings. Also downgrades parent company Jardine Matheson Holdings (J36.SG) to Sell from Hold for similar reasons, raises Jardine Matheson target to US$37.40 from US$32.00.



Jardine Strategic stock last down 0.2% at US$24.24, Jardine Matheson last down 1% at $41.20.