Company Name: JARDINE STRATEGIC HLDGS LTD
| Research House: Credit Suisse | Price Call: HOLD | Target Price: 42.00 |
Stock Name: JMH 400US$
Company Name: JARDINE MATHESON HLDGS LTD
| Research House: Credit Suisse | Price Call: BUY | Target Price: 72.00 |
Credit Suisse downgrades both Jardine Matheson (J36.SG) and Jardine Strategic (J37.SG) to Neutral from Outperform as it believes “near-term positives have been priced in, and there is limited scope for a further narrowing of discount to NAV.”
It notes JM and JS currently trade at NAV discounts of 16% and 27%, respectively, close to historical lows. Following the Interim Management Statement, the house reduces its 2013-14E EPS for JM/JS by 4%, mainly through lower estimates for its key subsidiaries Astra International (ASII.JK), Dairy Farm (D01.SG) and Jardine Pacific.
It notes mixed trading across key subsidiaries, with Astra’s 1Q13 results achieving 20% of FY13 consensus forecast, Dairy Farm’s earnings marginally lower on year due to weakness in Malaysia, and the vacancy rate for HongKong Land’s (H78.SG) central portfolio at 6.3%, up from 3.4% in December 2012.
The house cuts JM’s target price to US$72 from US$74, and JS’s target price to US$42 from US$43, as it sees “limited further upside given the strong share price performance since October 2012.” JM is flat at US$67.62. JS is up 0.3% at US$40.79.
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