Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>After publishing my insight (<a href="https://skr.ma/y1QWE" target="_blank" rel="noopener">Jardine Matheson (JM SP): Trading "Cheap"</a>) last week, my NAV calcs were called into question by some readers, when compared to street estimates.</li>
<li>Which is cool. I'm big enough to admit mistakes, where needed. So I've done some digging, including a back and forth with <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>.</li>
<li>The upshot? I have not lead you astray. You've been coming to the right place.</li>
</ul>


After publishing my insight (Jardine Matheson (JM SP): Trading "Cheap") last week, my NAV calcs were called into question by some readers, when compared to street estimates.
Which is cool. I'm big enough to admit mistakes, where needed. So I've done some digging, including a back and forth with Jardine Matheson Holdings (JM SP).
The upshot? I have not lead you astray. You've been coming to the right place.


Jardine Matheson (JM SP): Squeezing More Life Out Of The NAV

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Despite slower top-line growth, Trip.com posted firmer margins in Q224</li>
<li>Cash Operating Expenses as a % of Net Revenue fell by around -250 bps Y/Y</li>
<li>Post-Covid, Trip.com has less competition; BUY with target of US$58 per ADS</li>
</ul>


Despite slower top-line growth, Trip.com posted firmer margins in Q224
Cash Operating Expenses as a % of Net Revenue fell by around -250 bps Y/Y
Post-Covid, Trip.com has less competition; BUY with target of US$58 per ADS


Trip.com Q224: Slower Growth | But Higher Margins | Competition Has Eased | BUY with US$58 Target

<ul>
<li>I see <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>'s discount to NAV and implied stub at 12-month lows.</li>
<li>Recent interim results were okay. Stripping out <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 Holdings (DFI SP)</a>'s outperformance, the remainder of the Jardine stable delivered weaker numbers. </li>
<li>Further afield, the implied stub is marginally below the long-term average since the <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> circularity was collapsed in April 2021. </li>
</ul>


I see Jardine Matheson Holdings (JM SP)'s discount to NAV and implied stub at 12-month lows.
Recent interim results were okay. Stripping out DFI Retail Group Holdings (DFI SP)'s outperformance, the remainder of the Jardine stable delivered weaker numbers. 
Further afield, the implied stub is marginally below the long-term average since the Jardine Strategic Holdings (JS SP) circularity was collapsed in April 2021. 


Jardine Matheson (JM SP): Trading "Cheap"

<ul>
<li>July outbound travel (and seat capacity) fnally approached pre-Covid19 levels</li>
<li>Domestic air travel demand also showed modest Y/Y improvement in July </li>
<li>We still like Trip.com on improving profitability, BUY with US$55 target</li>
</ul>


July outbound travel (and seat capacity) fnally approached pre-Covid19 levels
Domestic air travel demand also showed modest Y/Y improvement in July 
We still like Trip.com on improving profitability, BUY with US$55 target


Monthly Chinese Tourism Tracker | Outbound Activity Approaches Pre-Covid Levels | (August 2024)

<ul>
<li>Just shy of three years ago, <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP (BHP AU)</a> announced the unification of its dual-headed corporate structure to make BHP "simpler and more agile".</li>
<li>Collapsing DLCs/share-classes was all the rage back then. The prior year, <a href="https://www.smartkarma.com/entities/unilever-nv" target="_blank" data-smartkarma-citation="entities:21141:1" rel="noopener">Unilever (UNA NA)</a> collapsed its DLC; and <a href="https://www.smartkarma.com/entities/royal-dutch-shell-plc-adr" target="_blank" data-smartkarma-citation="entities:792:1" rel="noopener">Royal Dutch Shell </a> unified its A and B lines in 2021. </li>
<li>
<a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio (RIO AU/LN)</a> is one of only a handful of remaining DLCs. Renewed investor calls to unwind the DLC and the recent UK's listing regime reform necessitate a rethink.</li>
</ul>


Just shy of three years ago, BHP (BHP AU) announced the unification of its dual-headed corporate structure to make BHP "simpler and more agile".
Collapsing DLCs/share-classes was all the rage back then. The prior year, Unilever (UNA NA) collapsed its DLC; and Royal Dutch Shell  unified its A and B lines in 2021. 

Rio (RIO AU/LN) is one of only a handful of remaining DLCs. Renewed investor calls to unwind the DLC and the recent UK's listing regime reform necessitate a rethink.


Rio Tinto (RIO AU/LN): Thinking About The "Unification"

Singapore

Mandarin Oriental International Limited is an owner and operator of luxury hotels, resorts, and residences. The Group now operates, or has under development, hotels in the Americas, Europe, Middle East, and North Africa. Mandarin Oriental International also operates, or has under development, residences at Mandarin Oriental.

Mandarin Oriental International (MAND SP)

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Mandarin Oriental International (MAND SP)

Jardine Matheson (JM SP): Squeezing More Life Out Of The NAV

I've bolted on US$0.5bn to NAV. That adjustment doesn't move the needle. Look to set up the stub: Long JMH, short DFI, HKL, MO & JC&C on a...

David Blennerhassett

Trip.com Q224: Slower Growth | But Higher Margins | Competition Has Eased | BUY with US$58 Target

Trip.com posted slower revenue growth in Q2, but margins improved as the company expertly managed operating expenses. Post-Covid, Trip.com's...

Tracking Traffic

Jardine Matheson (JM SP): Trading "Cheap"

I’ve received some feedback questioning my NAV calculations. Happy to take up the challenge and make adjustments where needed. I flesh out more...

David Blennerhassett

Monthly Chinese Tourism Tracker | Outbound Activity Approaches Pre-Covid Levels | (August 2024)

July data shows continuing improvement in Chinese outbound and domestic travel activity. We still like shares of Trip.com, and retain our BUY...

Tracking Traffic

Rio Tinto (RIO AU/LN): Thinking About The "Unification"

At a time when the LSE has opted to dumb down the checks and balances for listed companies on its bourse, now may be just the right time to...

David Blennerhassett

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