Jardine Matheson Holdings Limited (SGX: J36): Here's What You Should Know About It Before Investing
Sudhan Pâ—Ź
Jardine Matheson Holdings Limited (SGX: J36) is a conglomerate with interests in many businesses.
Right here, let’s look at essential things we should know about the blue-chip company in just 60 seconds!
What’s Jardine Matheson’s Business About?Â
Founded in China in 1832, Jardine Matheson is a diversified Asian-based group with operations in Greater China and Southeast Asia.
Jardine Matheson owns an 85% interest in Jardine Strategic Holdings Limited (SGX: J37), a listed group with interests in other listed companies.
Examples of those companies include:
- Dairy Farm International Holdings Ltd (SGX: D01),
- Hongkong Land Holdings Limited (SGX: H78),
- Jardine Cycle & Carriage Ltd (SGX: C07), and
- Mandarin Oriental International Limited (SGX: M04).
Below’s a chart showing the breakdown of Jardine Matheson’s 2019 underlying profit for a better understanding of its business:
Source: Jardine Matheson 2019 annual report
Jardine Matheson’s Financial HighlightsÂ
The following table shows Jardine Matheson’s key financial metrics from 2015 to 2019 (the company has a 31 December year-end):
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Revenue (US$' million) | 37,007 | 37,051 | 38,748 | 42,527 | 40,922 |
| Net profit (US$' million) | 1,799 | 2,503 | 3,943 | 1,722 | 2,838 |
| Underlying net profit (US$' million) | 1,360 | 1,386 | 1,543 | 1,655 | 1,589 |
| Underlying earnings per share (US$) | 3.64 | 3.71 | 4.10 | 4.40 | 4.23 |
| Cash flow from operations (US$' million) | 4,089 | 3,967 | 4,298 | 5,157 | 4,865 |
Over the last five years, Jardine Matheson’s revenue has grown from US$37.0 billion to US$40.9 billion, up by just 2.6% per year.
Meanwhile, the conglomerate’s underlying net profit increased at a faster rate of 4.0% per annum, from US$1.4 billion to US$1.6 billion.
Underlying net profit excludes items such as fair value gains or losses on the revaluation of investment properties.
Jardine Matheson’s Dividend History
Next, let’s look at Jardine Matheson’s dividends per share and payout ratio in terms of underlying earnings per share:
| Total dividend per share (US$) | Dividend payout ratio | |
|---|---|---|
| 2015 | 1.45 | 40% |
| 2016 | 1.50 | 40% |
| 2017 | 1.60 | 39% |
| 2018 | 1.70 | 39% |
| 2019 | 1.72 | 41% |
Jardine Matheson’s dividends per share have been growing over the years, from US$1.45 in 2015 to US$1.72 in 2019.
Also, the group’s dividends are well-protected as its dividend payout ratio has been around 40% only.
Major Risk for Jardine Matheson to Take Note Of
58% of Jardine Matheson’s 2019 underlying profit came from Greater China, with a large part flowing from Hong Kong.
Hong Kong has been in the press for the wrong reasons lately.
Last month, the Chinese government bypassed the territory’s legislature to impose a national security law. That has sparked some furore from the international community.
The law comes hot on the heels of the anti-extradition bill protests that have rocked the territory since 2019.
If international investors become less confident about putting their money in Hong Kong and collectively pull out of the territory, Jardine Matheson’s business could be hit badly.
Jardine Matheson’s Share Price And Valuation
Over the last five years, Jardine Matheson’s share price has not been performing well, falling some 28%.
At Jardine Matheson’s share price of US$39.94 right now, the conglomerate has a price-to-earnings ratio of around 5 and a dividend yield of 4.3%.
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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock.
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