Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<strong><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></strong>'s implied stub value is around its highest-ever level, dating back to 2004. </li>
<li>The simple ratio of JCNC/ <strong><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></strong> 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 <strong><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></strong> 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. 


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Equity Bottom-Up

Jardine Matheson Holdings / Equity Bottom-Up

<ul><li><p>After Ben Keswick took over Jardine Matheson, the company has slowly transitioned away from being an owner-operator to more of a portfolio manager.</p></li><li><p>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.</p></li><li><p>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.</p></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>I see <strong><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></strong>'s discount to NAV and implied stub at 12-month lows.</li>
<li>Recent interim results were <em>okay</em>. Stripping out <strong><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></strong>'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 <strong><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></strong> 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>
<strong><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></strong> is currently trading at a ~9% discount to NAV, around the narrowest since the post-Covid nadir in April 2020.</li>
<li>JCNC's recent results highlighted a marked improvement in its unlisted Vietnamese automotive ops. </li>
<li>Weakness in the Indonesian rupiah has taken some of the shine off <strong><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></strong>'s strong sales growth. </li>
</ul>



Jardine Cycle &amp; Carriage (JCNC SP) is currently trading at a ~9% discount to NAV, around the narrowest since the post-Covid nadir in April 2020.
JCNC's recent results highlighted a marked improvement in its unlisted Vietnamese automotive ops. 
Weakness in the Indonesian rupiah has taken some of the shine off Astra International (ASII IJ)'s strong sales growth. 


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<p><em><strong>This week in StubWorld ...</strong></em></p>
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<p><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>, relative to <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 around record-lows outside the Covid-affect low last year. This is occurring amid recent corporate developments within the Jardine stable of companies.</p>
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<div>
<p>Preceding my comments on JCNC are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...



Jardine Cycle &amp; Carriage (JCNC SP), relative to Astra International (ASII IJ), is around record-lows outside the Covid-affect low last year. This is occurring amid recent corporate developments within the Jardine stable of companies.



Preceding my comments on JCNC are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


Vietnam

Refrigeration Electrical Engineering Corporation is an electrical company. The Company manufactures, markets, and installs refrigerating systems for commercial and industrial purposes.

Refrigeration Electrical Engineering (REE VN)

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Refrigeration Electrical Engineering (REE VN)

JCNC's Logic-Defying Valuation

There is no apparent justification for the current level. Expect Matheson to chip away at minorities. But a full-blown Offer appears unrealistic....

David Blennerhassett

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

After Ben Keswick took over Jardine Matheson, the company has slowly transitioned away from being an owner-operator to more of a portfolio manager.

Asian Century Stocks

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

JCNC Is Overstretched Vs. Astra

If you had set up the stub, I would be unwinding here. I'd look to reverse the stub as and when the current momentum reverses.

David Blennerhassett

StubWorld: JCNC Is A Set-Up Here

Jardines appear to be increasingly more proactive on the corporate front of late. Not being a UK listing, JCNC is unlikely to be tabled a derisory...

David Blennerhassett

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