Company Name: JARDINE STRATEGIC HLDGS LTD
| Research House: JP Morgan Chase | Price Call: BUY | Target Price: 67.00 |
JPMorgan initiates Jardine Matheson at Overweight with a US$67.00 target, tipping an attractive opportunity. “We see JM as a diversified high-quality portfolio of operating businesses offering quality exposure to growth in Asean and Greater China. JM has grown earnings at 23% annually since FY05, raised dividends by 15% p.a., and improved ROCE over the last decade.”
It adds, JM trades at 11x FY13 P/E, a discount to all its major operating subsidiaries; “Given its operating earnings streams, and a healthy growth profile, we think this is unjustified and an opportunity for investors.”
It sees JM’s strong earnings delivery as a key attraction. It prefers JM to Jardine Strategic (J37.SG) for its consistently higher dividend, forecasting JM’s dividend to grow by 10% p.a. over the next three years. It notes JM’s earnings mix is interesting at 40% from Indonesia, but only about 33% in IDR, and 33% from Hong Kong, with the emerging and developed market split about 50:50.
JM is trading at US$60.00.
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