Your 60-Second Guide to Jardine Strategic Holdings Limited (SGX: J37) Shares
Sudhan Pâ—Ź
Jardine Strategic Holdings Limited (SGX: J37) is one of the 30 companies that’s part of Singapore’s Straits Times Index.
Right now, let’s explore the important things we should know about the conglomerate in a mere 60 seconds!
What’s Jardine Strategic’s Business About?Â
Jardine Strategic is a holding company with interests in the following entities (percentage in bracket denotes Jardine Strategic’s ownership in the entity):
- Jardine Matheson Holdings Limited (SGX: J36) (58%),
- Hongkong Land Holdings Limited (SGX: H78) (50%),
- Dairy Farm International Holdings Ltd (SGX: D01) (78%),
- Mandarin Oriental International Limited (SGX: M04) (78%),
- Jardine Cycle & Carriage Ltd (SGX: C07) (75%), and
- Indonesia-listed Astra.
The following shows how much those businesses contributed to Jardine Strategic’s underlying net profit in 2019:
(Note: Underlying net profit excludes items such as fair value gains or losses on the revaluation of investment properties, and gains or losses arising from the sale of businesses, investments and properties.)
Jardine Strategic’s Financial HighlightsÂ
Now, let’s explore Jardine Strategic’s financial performance from 2015 to 2019 (the group has a 31 December year-end):
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Revenue (US$' million) | 29,391 | 29,552 | 30,848 | 34,094 | 32,665 |
| Net profit (US$' million) | 1,955 | 2,741 | 4,305 | 1,827 | 2,178 |
| Underlying net profit (US$' million) | 1,424 | 1,438 | 1,570 | 1,729 | 1,681 |
| Underlying earnings per share (US$) | 2.37 | 2.45 | 2.71 | 3.04 | 2.98 |
| Net asset value per share (US$) | 49.99 | 53.25 | 59.08 | 68.46 | 57.98 |
| Cash flow from operations (US$' million) | 3,972 | 3,432 | 3,750 | 4,885 | 4,963 |
Jardine Strategic’s revenue grew from US$29.4 billion to US$32.7 billion over the past five years, translating to an annualised growth of 2.7%.
As for its underlying net profit, it rose at a faster pace of 4.2% per year, from US$1.4 billion in 2015 to US$1.7 billion in 2019.
Jardine Strategic’s Dividend History
Moving on, let’s take a look at Jardine Strategic’s dividend per share and payout ratio in terms of underlying earnings per share:
| Total dividend per share (US cents) | Dividend payout ratio | |
|---|---|---|
| 2015 | 28.50 | 12.0% |
| 2016 | 30.00 | 12.0% |
| 2017 | 32.00 | 11.8% |
| 2018 | 34.00 | 11.2% |
| 2019 | 35.50 | 11.9% |
We can see that Jardine Strategic’s dividends have risen consistently over the years, from 28.50 US cents in 2015 to 35.50 US cents in 2019.
The group has room to increase its dividends further as its dividend payout ratio has been hovering at just 12%.
Major Risk for Jardine Strategic to Take Note Of
Jardine Strategic’s major risk is similar to Jardine Matheson’s since the Jardine Matheson owns 85% of Jardine Strategic.
In the write-up on Jardine Matheson, we mentioned that 58% of Jardine Matheson’s 2019 underlying profit was from Greater China, with a large part coming from Hong Kong.
If investors are not confident about the future of Hong Kong with the negative press that’s going on, Jardine Strategic’s business could be badly hit.Â
Jardine Strategic’s Share Price And Valuation
Jardine Strategic has not performed well in terms of its share price, as it has fallen 34% over the last five years.
At Jardine Strategic’s current share price of US$19.61, it’s going at a price-to-earnings ratio of around 10x, a price-to-book ratio of 0.6x and has a dividend yield of 1.8%.Â
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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.
