Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

Jardine Matheson Holdings / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a> is up ~10% this week and ~30% YTD. 53.3%-held <a href="https://www.smartkarma.com/entities/hongkong-land-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15465:1" rel="noopener">Hongkong Land (HKL SP)</a>, JMH's largest holding, is up 41% YTD and 85% over the year. </li>
<li>HKL has been on a tear since CEO Michael Smith started on the 1st April 2024, as HKL focused on capital allocation and portfolio management - read deleveraging.</li>
<li>The recent appointment of PAG's Lincoln Pan at the helm of JMH, has the street upbeat he will bring about similar positive developments. That's not unreasonable.</li>
</ul>



Jardine Matheson Holdings (JM SP) is up ~10% this week and ~30% YTD. 53.3%-held Hongkong Land (HKL SP), JMH's largest holding, is up 41% YTD and 85% over the year. 
HKL has been on a tear since CEO Michael Smith started on the 1st April 2024, as HKL focused on capital allocation and portfolio management - read deleveraging.
The recent appointment of PAG's Lincoln Pan at the helm of JMH, has the street upbeat he will bring about similar positive developments. That's not unreasonable.


Jardine Matheson (JM SP) On A Roll As The Street Turns (More) Positive

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Asian Century Stocks

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The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

<ul><li>After Ben Keswick took over Jardine Matheson, the company has slowly transitioned away from being an owner-operator to more of a portfolio manager.</li><li>The privatization of Jardine Strategic was under-priced, but it also simplified the corporate structure. That should be positive for minorities in the long term.</li><li>Jardine Matheson’s own board has now been stacked with private equity professionals. And new CEO Lincoln Pan comes from private equity firm PAG, where he built up its non-China business.</li></ul>

After Ben Keswick took over Jardine Matheson, the company has slowly transitioned away from being an owner-operator to more of a portfolio manager.The privatization of Jardine Strategic was under-priced, but it also simplified the corporate structure. That should be positive for minorities in the long term.Jardine Matheson’s own board has now been stacked with private equity professionals. And new CEO Lincoln Pan comes from private equity firm PAG, where he built up its non-China business.

A New Era for Jardine Matheson: An Under-The-Radar Transformation.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson (JM SP)</a>'s 77.8%-held <a href="https://www.smartkarma.com/entities/dfi-retail-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:7427:1" rel="noopener">DFI Retail Group (DFI SP)</a> has sold its entire 22.2% stake in <a href="https://www.smartkarma.com/entities/robinsons-retail-holdings-inc" target="_blank" data-smartkarma-citation="entities:10598:1" rel="noopener">Robinsons Retail Holdings (RRHI PM)</a> for ~US$283mn to "support its capital allocation strategy".</li>
<li>Preceding my comments on Matheson are the current setup/unwind tables for Asia-Pacific Holdcos.</li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.</li>
</ul>



Jardine Matheson (JM SP)'s 77.8%-held DFI Retail Group (DFI SP) has sold its entire 22.2% stake in Robinsons Retail Holdings (RRHI PM) for ~US$283mn to "support its capital allocation strategy".
Preceding my comments on Matheson are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation &gt;20%.


Event-Driven

<ul>
<li>They are rumours doing the rounds that <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a> could see potential inflow from a free float upweight in the MSCI May review.</li>
<li>The inflow is reportedly predicated on a reassessment of the 59% stake held in Matheson by the privatised <a href="https://www.smartkarma.com/entities/jardine-strategic-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15081:1" rel="noopener">Jardine Strategic Holdings (JS SP)</a>, that was subsequently cancelled in May 2022.</li>
<li>Elsewhere, Matheson's NAV discount is toward the wide end of its one-year range. </li>
</ul>


They are rumours doing the rounds that Jardine Matheson Holdings (JM SP) could see potential inflow from a free float upweight in the MSCI May review.
The inflow is reportedly predicated on a reassessment of the 59% stake held in Matheson by the privatised Jardine Strategic Holdings (JS SP), that was subsequently cancelled in May 2022.
Elsewhere, Matheson's NAV discount is toward the wide end of its one-year range. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/jardine-cycle-carriage-ltd" target="_blank" data-smartkarma-citation="entities:347:1" rel="noopener">Jardine Cycle &amp; Carriage (JCNC SP)</a>'s implied stub value is around its highest-ever level, dating back to 2004. </li>
<li>The simple ratio of JCNC/ <a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> is also the highest level outside the brief spikes post-Covid and during the 2008 GFC.</li>
<li>There is no apparent justification for the current valuation. And a takeover from <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson Holdings (JM SP)</a> at these levels appears unrealistic. </li>
</ul>



Jardine Cycle &amp; Carriage (JCNC SP)'s implied stub value is around its highest-ever level, dating back to 2004. 
The simple ratio of JCNC/ Astra International (ASII IJ) is also the highest level outside the brief spikes post-Covid and during the 2008 GFC.
There is no apparent justification for the current valuation. And a takeover from Jardine Matheson Holdings (JM SP) at these levels appears unrealistic. 


Singapore

Jardine Matheson Holdings Limited is a multinational enterprise with a portfolio of businesses focused on the Asia-Pacific region. The Group's activities include financial services, supermarkets, consumer marketing, engineering and construction, automobile trading, insurance broking, property investment, and hotels.

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