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1、68.0063.502.09.1PE1.41.31.31.2x2.02.02.12.4%Company reportIndustrialsConglomeratesEquity SingaporeabcGlobal ResearchJardine Matheson (JM SP)NeutralTarget price (USD)Share price (USD)Forecast dividend yield (%)Potential return (%)Note: Potential return equals the percentagedifference between the curr
2、ent share price andthe target price, plus the forecast dividend yieldDec 2011 a 2012 e 2013 eHSBC EPS 4.13 4.02 4.37Downgrade to N: Slowing growth caps upside Growth slowing due to demand softening at Astra, weakerIDR and HACTLs loss of key customer Cathay Pacific HSBC forecasts lowered and now 6-9%
3、 below consensus Downgrade to Neutral although target raised to USD68 (fromUSD58); fully valued after recent outperformanceHSBC PEPerformance15.41M15.83M14.512MAbsolute (%)Relative (%)2.81.53.3-2.122.14.7Growth slowing. We estimate Jardine Mathesons (JM) recurring profit doubled in thefive years to
4、2012e. This track record was one of the key reasons why JM was our preferredconglomerate for most of this period. However, half of JMs growth was driven by Astra25 January 2013Mark Webb*Regional Head of Conglomerate andTransport ResearchThe Hongkong and Shanghai BankingCorporation Limited+852 2996 .
5、hkStephen Wan*AnalystThe Hongkong and Shanghai BankingCorporation Limited+852 2996 .hkRohit Kadni*AssociateBangaloreView HSBC Global Research at:http:/*Employed by a non-US affiliate ofHSBC Securities (USA) Inc, and is notregistered/qualified pursuant to FINRAregulationsIssuer of report: The Hongkon
6、g andShanghai Bankingand risks are now rising. We expect auto sales to slow in 1H13 due to softer demand andthe impact of new down payment rules for Islamic financing. In addition, we estimate30% of our fair value (primarily Astra) is denominated in IDR so the recent depreciationof this currency exa
7、cerbates these trends. Finally, Jardine Motors is suffering from a weakperformance in a difficult mainland market and Jardine Pacifics main profit driver,HACTL, will lose over 40% of business in 2013e as Cathay switches to its own terminal.Earnings lowered; HSBC forecasts below consensus. As a resul
8、t of a cut in our forecastcontributions to JM from Astra, Jardine Motors and Jardine Pacific, we lower our 2012-14e recurring net profit by 3-6%. We are 6% and 9% below consensus for 2012e and2013e, respectively, and forecast 2011-14e recurring profit will rise at a 7% CAGR.Downgrade to Neutral. We
9、increase our appraised valuation to USD91 from USD82 toreflect, primarily, recent share and target price increases at HK Land and Dairy Farm. Weset a new target price of USD68 based on a 25% discount to appraised valuation (downfrom 30%). This is lower than the 30% average discount since 2010 to ref
10、lect the re-ratingof this stock over the period and brings the discount for JM in line with Swire Pacific andWharf. JM has risen 25% over the last year and has outperformed the MSCI AEJ index by9%. We argue the stock is now fully valued and downgrade to Neutral.Key financial summaryCorporation Limit
11、edYe DecEBIT Net profit HSBC NPEPS HSBC EPSPBDiv yield FCF yieldDisclaimer &DisclosuresThis report must be readwith the disclosures andthe analyst certifications inthe Disclosure appendix,and with the Disclaimer,which forms part of itUSDm USDm2011 3,909 3,4492012e 3,720 1,5762013e 3,961 1,6402014e 4
12、,510 1,836Source: Company data, HSBC estimatesIndexIndex levelRICBloombergSource: HSBCUSDm USD1,495 9.531,472 4.301,625 4.411,825 4.94Straits Times Index3,220JARD.SIJM SPUSD x4.13 15.44.02 15.84.37 14.54.91 12.9Enterprise value (USDm)Free float (%)Market cap (USDm)Source: HSBC%-459764,4794742,581Jar
13、dine Matheson (JM SP)Conglomerates25 January 2013Financials & valuationFinancial statementsValuation dataabcYear to12/2011a12/2012e12/2013e12/2014eYear to12/2011a12/2012e12/2013e12/2014eProfit & loss summary (USDm)EV/sales1.21.11.00.9RevenueEBITDADepreciation & amortisationOperating profit/EBITNet i
14、nterestPBTHSBC PBT37,9674,823-9143,909-1239,4884,78440,0854,700-9803,720-1344,9794,68642,7835,069-1,1083,961-175,1485,14847,7135,757-1,2474,510-25,7975,797EV/EBITDAEV/ICPE*P/NAVFCF yield (%)Dividend yield (%)*Based on HSBC EPS (diluted)9.31.315.41.4-4.12.09.61.215.81.34.92.08.81.114.51.38.52.17.81.1
15、12.91.26.72.4Taxation-873-810-846-978Net profitHSBC net profit3,4491,4951,5761,4721,6401,6251,8361,825Price relativeCash flow summary (USDm)6969Cash flow from operationsCapexCash flow from investmentDividendsChange in net debtFCF equity4,868-7,162-6,868-8221,275-3,3354,902-2,850-2,850-836-6989064,93
16、1-1,709-1,709-891-1,5432,4965,160-2,138-2,138-1,000-1,0632,63964595449446459544944Balance sheet summary (USDm)Intangible fixed assets 2,348Tangible fixed assets 29,100Current assets14,948Cash & others4,185Total assets58,297Operating liabilities7,6552,53730,78116,1614,88361,8728,5482,70531,21418,3616
17、,42665,1889,1012,91531,89520,6247,48968,8929,691392011Jardine MathesonSource: HSBCNote: price at close of 22 Jan 20132012 2013Rel to STRAITS TIMES INDEX392014Gross debtNet debtShareholders fundsInvested capital10,0675,88216,35637,88810,0675,18417,48239,38010,0673,64118,64840,08610,0672,57819,97338,2
18、55Jardine Matheson NAVBusinessJardine Pacific*USDm2,050Per share5.7% EV6%Jardine Motors1,0612.93%Ratio, growth and per share analysisJLTDairy Farm1,23310,8853.430.14%33%Year toY-o-y % changeRevenueEBITDAOperating profitPBTHSBC EPS12/2011a26.316.215.39.98.712/2012e5.6-2.5-4.8-47.5-2.712/2013e6.77.86.
19、53.48.712/2014e11.513.613.912.612.3HKLMOHAstra/otherOtherEquity valueShares outFair value per shareDiscountTarget (USD)7,1501,1468,4481,00032,9733629125%6819.83.223.32.89122%3%26%3%100%Ratios (%)Source: HSBCRevenue/IC (x)ROICROEROAEBITDA marginOperating profit marginEBITDA/net interest (x)Net debt/e
20、quityNet debt/EBITDA (x)CF from operations/net debt1.110.49.916.412.710.339.215.01.282.81.08.18.77.111.79.335.112.41.194.61.18.39.06.811.89.3292.28.10.7135.41.29.69.57.212.19.53013.55.40.4200.1Per share data (USD)EPS reported (diluted)HSBC EPS (diluted)DPSNAV9.534.131.2545.184.304.021.2647.744.414.3
21、71.3350.164.944.911.5053.722Jardine Matheson (JM SP)Conglomerates25 January 2013Slowing growth capsupside Growth slowing due to demand softening at Astra, weaker IDRand HACTLs loss of key customer Cathay Pacific HSBC forecasts lowered and now 6-9% below consensus Downgrade to Neutral. Although targe
22、t raised to USD68 (fromUSD58), fully valued after recent outperformanceabcBusiness outlookPrimarily due to a poor performance at JardineMotors and a depreciating IDR, the earningsoutlook for Jardine Matheson has weakened.1. Jardine Matheson 2012e recurring net profitJardine C&C / Astra (ASII IJ; N;
23、TPIDR7,700) Auto risks risingJM has a 29% effective stake in AstraInternational (Astra) through its interest in JardineCycle & Carriage (JCNC). Astra makes up 37%of 2012e recurring profit and 26% of ourAstra37%Pacific12%Motors1%JLT5%HK Land19%appraised equity valuation.As we highlighted in our recen
24、t report on Astra(Growth stalls as auto risks rise, 14 January2013), we believe the risks to growth in the autodivision have risen.4W demand has softenedMOH3%Source: HSBC estimatesDairy Farm23%While Astras December wholesale car (4W)volumes rose c12% y-o-y, inventory picked upsubstantially. Astras i
25、nventory days doubledfrom October to November and Astra said excessAs a result, we have lowered our 2012-14erecurring net profit forecasts by 3-6% and ourrevised estimates are now 6% and 9% belowconsensus in 2012e and 2013e respectively.stock for the whole industry caused discounting tojump at the e
26、nd of December/early January. As aresult, we believe production levels were probablytemporarily lowered. While Astras inventory hasnow returned to normal, the year-end soft patchwas likely caused by demand weakening in areasreliant on commodities, seasonality, and finallygeneral inflation cutting co
27、nsumer purchasing3Jardine Matheson (JM SP)Conglomerates25 January 2013power. The low-cost green car sales couldultimately boost volumes by c20% (and sales byabout half that amount). However, the launch isbeing delayed until regulations are in place andproduction will only gradually be ramped up toth
28、e annual target of 110,000 units.Motorcycles likely to suffer as Sharia financerules brought into line with non-Islamic financeMotorcycle sales are likely to suffer from Januaryas the Sharia finance down-payment exemptionhas been removed. As Sharia finance in 2H12 didnot require minimum down payment
29、s, itaccounted for 60% of new 2W finance bookingsin this period (up from under 10% before theconsumer finance minimum down-payment ruleswere introduced last June). Indeed, on average,Astra finance companies required a 7.5% downpayment on Sharia-financed 2Ws compared to theminimum down payment requir
30、ed on normal autoloans of 20%. However, from January 2013, non-bank auto finance companies will have to have thesame 20% down payment for Sharia financing asfor non-Islamic financing and this creates a clearnear-term risk to 2W sales due to the highproportion (c80%) purchased using credit.United Tra
31、ctors (UNTR IJ, N, TPIDR20,000) Facing headwindsKomatsus heavy equipment sales have comeunder pressure from a sharp fall in demand fromits most important market the mining sector and severe competition in other segments fromlocal as well as international brands. UTs heavyequipment sales have decline
32、d significantly in thelast four months and preliminary figures indicatesales of c200 units (down 67% y-o-y) in December2012, the lowest level in more than three years.The environment remains challenging for UT ascuts in miners production plans are loweringsales of heavy equipment. As a result, we fo
33、recastKomatsus sales volume to decline by 3% y-o-y in2013. While the related services business is still4doing well, the growth rate in 2013 is likely to bebelow the estimated 2012 rate due to the drop inin heavy equipment sales volumes.PAMAs 2013 coal production should be in linewith the mining indu
34、stry. PAMA is cutting thestrip ratio by targeting easier to mine coal in orderto maintain reasonable margin levels. We assumecoal extraction will decline by 3% y-o-y and aforecast strip ratio of 8.5x in 2013, down from9.2x in 2012. We maintain our gross profit marginforecasts of 15-16% for 2012-13.W
35、e base our coal price assumption on a currentNewcastle thermal coal price of about USD90/t,which gives an average Indonesian coal price ofUSD78/t for 2013, set at an 87% of thebenchmark thermal coal price forecast, forPAMAs customers.We forecasts recurring net profit growth of 2% in2012 and 6% in 20
36、13 (see our United Tractors noteDowngrade to N: Coal price risk priced in, butupside potential limited, dated 14 December 2012).Our earnings forecasts downgraded for AstraWe have recently cut our auto forecasts and ourearnings estimates for United Tractors. As aresult, we reduce our 2013-14 EPS esti
37、mates by 3-4%. We now expect 2013 EPS to rise only 3%and we are 8% below consensus. The impact onJM will be exacerbated by the 7% IDR depreciationversus the USD over the past year. The net impactis that we have lowered the forecast contributionto JM from JCNC/Astra by 6-15% over theforecast period.D
38、airy Farm (DFI SP; N; TP USD12.7)JM has a 63% effective interest in Dairy Farm(DF). DF makes up 23% of 2013e recurring profitand 33% of our appraised equity valuation.Outlook remains robustWe expect a strong performance across businesssegments in 2013e led by an economic recoveryabcHACTL14%Jardine M
39、atheson (JM SP)Conglomerates25 January 2013in Asia. We expect retail sales in Dairy Farmsmain markets to be strong in 2013e. HSBCforecasts Hong Kong, Indonesia and mainlandChina retail sales will grow over 15% y-o-y. Weexpect the other main profit growth drivers will beaccelerated store openings, th
40、e full impact fromacquisitions in Cambodia and Philippines, aturnaround in convenience store operations inChina and continued growth in health and beauty.We expect IDR depreciation will largely offset thepositive impact of the appreciation of Asiancurrencies. We raise our 2013-14e forecasts byJardin
41、e Pacific outlook mixedJardine Pacific is a wholly-owned subsidiary ofJM, and makes up 12% of 2012e recurring profitand 6% of our appraised equity valuation.2. Jardine Pacific 2012e net profit breakdownOthers7%Restaur28%Schindler18%abc1% mainly due to the net positive currency impactand we now expec
42、t HSBC net profit will grow18% y-o-y in 2013e. Our forecast assumes a 1%Gammon14%JEC19%positive impact on 2013e net profit from currencymovements. We are 1-3% above consensus for2013-14e.Trading at top end of PE trading rangeDFs shares have risen 14% y-t-d, outperformingthe index by 13%. DF is curre
43、ntly trading at a 27x2013e consensus PE which is above its long-termaverage of 21x and just below the five-year peakof 28x. While we believe DFs market leadingposition and pan-Asia focus provide valuationsupport, we see limited upside from current levels.Hongkong LandHKL SP; OW current share price U
44、SD7.6JM has a 40% effective interest in Hongkong Land(HKL). HKL makes up 19% of 2012e recurringprofit and 22% of our appraised equity valuation.In its interim statement, JM noted that HKLscommercial properties saw generally positiverental reversions in the period to early Novemberand that the contri
45、butions from residentialdevelopments sales were better than anticipated atthe start of the year.Source: HSBC estimatesJardine Pacific is a mini-conglomerate with mainprofit contributors being HACTL (Hong KongInternational Airports largest cargo handler),Jardine Engineering Corporation (JEC), Jardine
46、Schindler (lift installation and maintenance),construction company Gammon and itsrestaurant business.These businesses tend to be relatively morecyclical and there is often little visibility toearnings. In particular Gammon books profitsbased on the timing of the completion of projectsand this is dif
47、ficult to predict. After slightlydisappointing 1H12 results, JMs interimstatement indicated a continued mix performancefor the businesses within Jardine Pacific.We believe risks to earnings will continue in2013e. Cathay Pacific Group represents about40% of the volumes at HACTL and the airline hasrec
48、ently opened its own air cargo terminal at HKInternational Airport. While this new terminal willtake about six months to ramp up, by 4Q13 all ofCathays business will probably have beentransferred over to its own terminal. We estimatethis loss of earnings will offset growth elsewherewithin Jardine Pa
49、cific and as a result there will beno net profit growth in 2013e.5USDm%Jardine Matheson (JM SP)Conglomerates25 January 20133. Changes to HSBC recurring net profit forecastsabc_ New _2012e 2013e 2014e_ Old _2012e 2013e 2014e_ Change_2012e 2013e 2014eJardine PacificJardine MotorsJLTHK LandDairy FarmMO
50、HJardine C&C (incl Astra)Recurring NP1741173287337385521,4721762280357397505441,6251863585362455686341,8251821473286336385851,5141852680356393506201,7091953985359450687441,940-4%-24%0%0%0%1%-6%-3%-5%-17%-1%0%1%-1%-12%-5%-4%-9%0%1%1%0%-15%-6%Source: HSBC estimatesAs a result of comments made in the i
51、nterimstatement plus weak volumes at HACTL, we havelowered our estimates of 2012-2014e recurringnet profit contributions by 4-5%.Mandarin OrientalMAND SP; OW; CP USD1.70; TP: USD1.90JM has a 60% economic interest in MandarinOriental (MOH), a luxury chain withapproximately 7,300 rooms and an addition
52、al3,000+ rooms planned. MOH makes up 3% ofJMs 2012e recurring profit and 3% of ourappraised equity valuation.As we anticipated, the hotel market has slowed in2H12. We make no changes to our forecasts, andassume MOHs RevPAR to grow at 5% in 2012eand pick up to 8% in 2013e from improvements inRevPAR a
53、cross the board as Asian growthgradually recovers.4. HSBC Jardine Matheson appraised valuationOther businessesJardine Motors weak sales in ChinaJardine Motors (Motors) is a wholly-ownedsubsidiary and makes up 1% of JMs 2012erecurring profit and 3% of our appraised equityvaluation.Sales of Mercedes B
54、enz in China grew 4% in2012, although the situation deteriorated in 4Q12with sales falling 9% y-o-y. We do expect thesituation will improve gradually in 2013e asJardine Motors captures market share from theopening of outlets, but overall cut our 2012e and2013e forecasts by 5% and 8% respectively tor
55、eflect the difficult market. We forecast 2012erecurring profits will fall 83% y-o-y and thenrebound 102% (off a very low base) in 2013e. Wealso cut our valuation by 7% as a result of theweaker earnings.BusinessUSDm Per shareCommentsPrevious% ChangeJardine Pacific*Jardine MotorsJLTDairy FarmHKLMOHAst
56、ra/otherOtherEquity value2,0501,0611,23310,8857,1501,1468,4481,00032,9735.72.93.430.119.83.223.32.8916%3%4%33%22%3%26%3%100%12x 2013e PE based on Hang Seng Index fair valueConsensus EV / Sales of 0.35x, and apply a 25% discountPE trading rangeHSBC target price of USD12.7Share price USD7.6HSBC target
57、 price of USD1.9HSBC target price of Astra IDR 7,700/shareInvestments at HSBC estimate of market value2,1501,1381,1939,3425,7391,1468,1011,00029,809-5%-7%3%17%25%0%4%0%11%Shares out362362Fair value per shareDiscountTarget9125%688230%5811%19%*Note: HACTL valued at 10x 2013e PESource: HSBC estimates6-
58、40%-50%-60%50%40%30%20%10%0%Jardine Matheson (JM SP)Conglomerates25 January 2013JLT greater stake boosts contributionJM has a 42% in JLT and it makes up 5% of JMs2013e recurring profit and 4% of our appraisedequity valuation. We make no changes to ourbelieve JM is now fully valued and we downgradeou
59、r rating to Neutral from Overweight.6. At the top end of its range: JMs discount to NAVabcoperating assumptions, and forecasts a conservative6% revenue growth in 2012e and 5% in 2013e.However, we forecast 2012e earnings contributionsto JM to increase 38% primarily due to an increasein JLT ownership
60、by JM, followed by an 8%growth in 2013e. We increase our valuation of JLT0%-10%-20%-30%Discount to NAVmarginally by 3% from rolling forward theearnings base used for valuation to 2014e.-70%-80%Jan-00Jan-03Jan-06Jan-09Jan-125. Conglomerate discount to appraised valuationSource: Company and HSBC estim
61、atesDisc to NAVWe raised our appraised valuation of JM toUSD91 from USD82 per share due to the recentincrease in our target price of Dairy Farm and theshare price of Hongkong Land. We set our targetprice for JM at a 25% discount to appraisedvaluation (from 30%), giving us new target priceAstra Int H
62、WLJMSw ireWharfFirstof USD68.Pac APacificWe are lowering our discount to appraisedSource: HSBC estimatesRecurring net profit forecasts changesAs a result of cuts to our forecast contributions toJM from Astra, Jardine Motors and JardinePacific, we have lowered our 2012-14e recurringnet profit forecas
63、ts by 3-6%. Our revised forecastsare 6% below consensus on a recurring basis in2012e and 9% and 8% below for 2013e and2014e, respectively.Valuation and risksDowngrade to Neutral, targetincreased to USD68 from USD58Over the past year, JM shares have generated atotal return of 25% and have outperforme
64、d theMSCI Asia Ex-Japan Index by 9%. Therefore,despite an increase in our appraised valuation, wevaluation applied to the holding company toreflect the consistently strong performance of theGroup and our greater confidence in the outlookfor markets generally. At 25%, its discount toappraised valuati
65、on is at the same level as SwirePacific and Wharf.Under our Equity Research model, the Neutralrating band for non-volatile stocks equals the localhurdle rate (average cost of equity) set by ourEquity Strategy team, plus or minus 5ppt. Thehurdle rate of 9% for Singapore translates into aone-year pote
66、ntial return of 4-14%. Our target priceplus 2012e DPS of USD1.26 implies a 9% potentialreturn, which sits within this band; we thereforedowngrade our rating to Neutral from Overweight.The key risks to our rating and estimates forJardine Matheson consist of the risks to AstraInternational and Dairy F
67、arm detailed below.7Jardine Matheson (JM SP)Conglomerates25 January 2013Astra InternationalASII.JK; N; CP: IDR7,750; TP: IDR7,700We value Astra based on our view of the mostappropriate methodology for each of itsbusinesses. Where subsidiaries are separatelylisted and under our coverage we use HSBC t
68、argetprices (United Tractors (UNTR IJ, N, TPIDR20,000) and Astra Agro Lestari (AALI IJ,UW, TP IDR22,000). We use the current marketvalue for listed companies not under our coveragesuch as Astra Otoparts (AUTO IJ, IDR3,550, NotRated) and the information technology business,Astra Graphia (ASGR IJ, IDR
69、1,350, Not Rated).We recently raised our appraised valuation ofAstra to IDR8,127 per share from IDR7,840 pershare as we rolled over our valuation by sixmonths. Our main valuation assumptions are: Consolidated Auto business: We value thisbusiness at a 16x 2014e EV/EBIT, which isbased on a 5% premium
70、to the long-termaverage multiple (2005-11) of its closestpeers. A premium is given for its strongmarket share in the industry and higherindustry growth rate. Astra Honda Motors: We value it through adividend discount model (DDM) as more than90% of its earnings are distributed. Weassume a WACC of 10.
71、7% and a long-termdividend growth rate of 6.5%. Other Automotive Associates: We value thisbusiness at a 19x 2014e PE, which is based ona 5% premium to the long-term average PEmultiple (2005-11) of its closest peers. Financial services: We value Astras financialservices business at a 3.4x FY14e price
72、-to-book (PB) based on its ROE and growthoutlook. We value Astras stake in BankPermata at the current market value. Thisgives us a combined fair value of IDR40.2trnfor Astras stake.8 Other businesses: We value Astrasinfrastructure business at an 11x 2014e PEbased on the average one-year forward PE o
73、fChinese toll road operators. We value theother businesses at a 12x 2014e PE based onthe long-term average one-year forward PE ofthe Jakarta Composite Index.We set our target price at an unchanged 5%discount to our appraised valuation of Astra,towards the midpoint of the 2005-08 range. A 5%discount
74、to our appraised valuation gives a targetprice of IDR7,700 compared with our previoustarget price of IDR7,450.Under our research model, the Neutral rating bandfor non-volatile stocks equals the local hurdle rate(average cost of equity) set by our Equity Strategyteam (10% for Indonesia), plus or minu
75、s 5ppt. Atthe time we set our target price, it implied apotential return (including forecast dividend yield)within this band; therefore, we rate the sharesNeutral. Potential return equals the percentagedifference between the current share price and thetarget price, including the forecast dividend yi
76、eldwhen indicated.Risks to our rating and forecasts. Astra sharesare positively correlated with commodity prices(mainly coal and palm oil) and the volume of autounit sales. Therefore, any sharp decline inIndonesias automobile market unit sales due ordrop in commodity prices, especially coal andpalm
77、oil, are key downside risks to our earningsestimates and valuation. Conversely, better-than-expected two-wheeler sales or a pick-up incommodity prices are an upside risk.abcOther15%SGD8%Jardine Matheson (JM SP)Conglomerates25 January 20137. Appraised valuation mix of asset by currencyRisks to our vi
78、ew. The Dairy Farm share price ispositively correlated to Asias retail sales exJapan. Substantial USD weakness against AsianabcTWD6%MYR5%IDR30%HKD36%currencies, a well-priced acquisition or furtherturnaround of its mainland 7-Eleven franchise arepotential positive share price drivers. Any suddendown
79、turn in retail sales in Asian markets andfurther weakening of Asian currencies would benegative for Dairy Farm shares.Source: HSBC estimatesDairy FarmDFI SP; N; USD12.39; TP USD12.7Valuation methodology. We value Dairy Farmusing its PE trading range, its nearest listed peersat HSBC target prices, an
80、d a REP valuation. Werecently raised our target price to USD12.7 fromUSD10.9 as we rolled forward our valuation bysix months. Our target price was set at themidpoint of the range suggested by all threevaluation methods, implying a potential return,including the 2012e dividend, within the Neutralrati
81、ng band under our Equity Research model.Although we believe Dairy Farms track record isexcellent, the stock has outperformed the StraitTimes Index y-t-d and is priced above its long-term trading range. At our target price, DF wouldtrade at a 24x 2014e PE, which is near themidpoint of its recent trad
82、ing range.9Jardine Matheson (JM SP)Conglomerates25 January 2013Financial modelForecast income statementabcYear ending 31 Dec (USDm)Jardine PacificJardine MotorsHK LandDairy FarmMOHJardine Cycle & CarriageOtherRevenueDepreciationOperating lease paymentsOperating costs20101,2863,2881,3417,97151315,680
83、-2630,05376277825,12220112,6554,2821,2249,13459820,084-1037,96791498332,1612012e2,2474,3111,0249,92766621,63027940,0859801,03834,3472013e2,6044,5631,61211,14773622,12142,7831,1081,10836,6072014e2,9234,9401,59712,39575825,10047,7131,2471,23540,721EBITJardine PacificJardine MotorsHK LandDairy FarmMOHJ
84、ardine Cycle & CarriageOtherEBITFinancing charges52136708468651,8141483,390-13198102832535782,315-513,909-1238119714588802,290-513,720-13494368896781082,207-513,961-17105579267721462,555-514,510-2Profit from associates/JVsJardine PacificJardine MotorsJLTHK LandDairy FarmMOHJardine Cycle & Carriage (
85、incl. Astra)OtherNon-recurring gainsProfit from associates/JVsNon-recurring gainsChange in fair value of investment propProfit before taxTaxationMinoritiesNet ProfitHSBC net profit11704617447457867381,7114453,2168,6318474,7003,0841,364102248766610674192321,230654,4079,4888735,1663,4491,4951060712006
86、21463114511,151-92514,9798102,5931,5761,47298080251851467701,204005,1488462,6621,6401,62599085239991775001,289005,7979782,9831,8361,825Recurring profit contributionJardine PacificJardine MotorsJLTHK LandDairy FarmMOHJardine Cycle & Carriage (incl Astra)15687483322592746917961532853013459717411732873
87、3738552176228035739750544186358536245568634Other-14-15Net profit1,3641,4951,4721,6251,825Source: Company data, HSBC estimates10Jardine Matheson (JM SP)Conglomerates25 January 2013Actual and forecast balance sheetabcYear to 31 December (USDm)201020112012e2013e2014eNon-current assetsFixed assetsIntang
88、ible assetsInvestment propertiesAssociatesOther non-current assetsTotal non-current assets4,8161,95918,4266,3854,13135,7166,1212,34822,9797,2564,64543,3496,5452,53724,2367,7484,64545,7116,7852,70524,4298,2634,64546,8277,1682,91524,7278,8134,64548,268Current assetsCash & deposits non-financeCash & de
89、posits financeProperties for saleOtherTotal current assetsTotal assets4,0991761,1846,90112,36048,0763,9632221,5219,24214,94858,2974,6612221,521975816,16161,8726,2042221,5211041418,36165,1887,2672221,5211161420,62468,892Current LiabilitiesCreditorsST Debt non-financeST Debt financeTax payableOther cu
90、rrent liabilitiesTotal current liabilitiesNet assets less current liabilities58482,0571,403273559,63638,44072751,3471,6703235710,67247,62576811,3471,6708105711,56550,30781981,3471,6708465712,11853,07091421,3471,6704915712,70856,185Long term liabilitiesLT Debt non-financeLT Debt financeDeferred liabi
91、litiesTotal non-current liabilitiesPaid-in capitalReservesOwn shares heldShareholders fundsMinoritiesTotal equity & lib4,2941,1281,0586,48016215,049-1,50113,71018,25038,4405,0482,0021,3138,36316518,046-1,85516,35622,90647,6255,0482,0021,3138,36316519,172-1,85517,48224,46250,3075,0482,0021,3138,36316
92、520,338-1,85518,64826,05953,0705,0482,0021,3138,36316521,663-1,85519,97327,84956,185Invested Capital calculationFixed assetsInvestment propertiesOther non-current assetsCurrent assetsCreditorsTax payableOther current liabilitiesDeferred liabilitiesCore assets minus current liabilitiesAv core investe
93、d capital6,77418,4264,1316,901-5,848-273-55-1,05830,18227,0968,46922,9794,6459,242-7,275-323-57-1,31337,88834,0359,08224,2364,6459,758-7,681-810-57-1,31339,38038,6349,49024,4294,64510,414-8,198-846-57-1,31340,08639,73310,08324,7274,64511,614-9,142-491-57-1,31341,58740,836Source: Company data, HSBC e
94、stimates11Jardine Matheson (JM SP)Conglomerates25 January 2013Actual and forecast cash flow statementabcYE 31 December (USDm)EBITDATax paidIncrease in working capital/otherDividend from assoNet interest paid20104,152-865-1,869736-11020114,823-808-2,139736-1192012e4,700-323-110659-1342013e5,069-810-1
95、40690-172014e5,757-1,333-255738-2Other166181Operating cash flow2,2102,6744,7934,7914,905Capital expenditureCapexSale of assets-1,148207-1,713167-2,599-9-1,7090-2,1380Net investment in subsidsNet investment in assocsOther-30-170-68-635-229-265Net cashflow from investingFree cash flowDividend paid by
96、coDividend paid to MI-1,2091,001-220-780-2,675-1-244-935-2,6082,185-450-1,037-1,7093,081-473-1,065-2,1382,767-511-1,193Others (incl. FX)Issue/(repurchase) of shares-477-431-243148Net cash flowNet debt, openingNet debt, closing-907-3,700-4,607-1,275-4,607-5,882698-5,882-5,1841,543-5,184-3,6411,063-3,
97、641-2,578Analysis of net cash/(debt)Cash non-financeCash financeST Debt non-financeST Debt financeLT Debt non-financeLT Debt financeNet debt4,099176-2,057-1,403-4,294-1,128-4,6073,963222-1,347-1,670-5,048-2,002-5,8824,661222-1,347-1,670-5,048-2,002-5,1846,204222-1,347-1,670-5,048-2,002-3,6417,267222
98、-1,347-1,670-5,048-2,002-2,578Source: Company data, HSBC estimatesKey financial ratiosPrice ratiosHSBC EPSEPS growth %PER xDPSYield %Net debt/equity %Operating ROICWACCROIC/WACCEV/Sales xEV/EBITDA xEV/ Invested capital xRating to Economic Profit (REP)ROECost of equityROE/cost of equityFCFE/sharehold
99、ers fundsFCF yield20103.803316.71.151.814.411%9%1.3x1.3x9.5x1.4x1.1x25%9.0%2.8x2%1%20114.13915.41.252.015.010%9%1.2x1.2x9.3x1.3x1.1x23%9.0%2.5x-6%-4%2012e4.02-315.81.262.012.49%9%1.0x1.1x9.6x1.2x1.2x9%9.0%1.0x7%5%2013e4.37914.51.332.18.18%9%0.9x1.0x8.8x1.1x1.2x9%9.0%1.0x11%9%2014e4.911212.91.502.45.
100、49%9%1.0x0.9x7.8x1.1x1.1x10%9.0%1.1x8%7%Source: Company data, HSBC estimates12Jardine Matheson (JM SP)Conglomeratesabc25 January 2013Notes13Jardine Matheson (JM SP)Conglomerates25 January 2013Notes14abcJardine Matheson (JM SP)Conglomeratesabc25 January 2013Disclosure appendixAnalyst CertificationThe
101、 following analyst(s), economist(s), and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that theopinion(s) on the subject security(ies) or issuer(s) and/or any other views or forecasts expressed herein accurately reflect theirpersonal view(s) and that no part of the
102、ir compensation was, is or will be directly or indirectly related to the specificrecommendation(s) or views contained in this research report: Mark Webb and Stephen WanImportant disclosuresStock ratings and basis for financial analysisHSBC believes that investors utilise various disciplines and inve
103、stment horizons when making investment decisions, whichdepend largely on individual circumstances such as the investors existing holdings, risk tolerance and other considerations.Given these differences, HSBC has two principal aims in its equity research: (1) to identify long-term investment opportu
104、nitiesbased on particular themes or ideas that may affect the future earnings or cash flows of companies on a 12-month horizon; and(2) from time to time to identify short-term investment opportunities that are derived from fundamental, quantitative, technicalor event-driven techniques on a 0- to 3-m
105、onth horizon and which may differ from our long-term investment rating. HSBC hasassigned ratings for its long-term investment opportunities as described below.This report addresses only the long-term investment opportunities of the companies referred to in the report. As and when HSBCpublishes a sho
106、rt-term trading idea the stocks to which these relate are identified on the website at of these short-term investment opportunities can be found under the Reports section of this website.HSBC believes an investors decision to buy or sell a stock should depend on individual circumstances such as the
107、 investorsexisting holdings and other considerations. Different securities firms use a variety of ratings terms as well as different ratingsystems to describe their recommendations. Investors should carefully read the definitions of the ratings used in each researchreport. In addition, because resea
108、rch reports contain more complete information concerning the analysts views, investorsshould carefully read the entire research report and should not infer its contents from the rating. In any case, ratings should notbe used or relied on in isolation as investment advice.Rating definitions for long-
109、term investment opportunitiesStock ratingsHSBC assigns ratings to its stocks in this sector on the following basis:For each stock we set a required rate of return calculated from the cost of equity for that stocks domestic or, as appropriate, regionalmarket established by our strategy team. The pric
110、e target for a stock represents the value the analyst expects the stock to reach overour performance horizon. The performance horizon is 12 months. For a stock to be classified as Overweight, the potential return,which equals the percentage difference between the current share price and the target p
111、rice, including the forecast dividend yieldwhen indicated, must exceed the required return by at least 5ppt over the next 12 months (or 10ppt for a stock classified as Volatile*).For a stock to be classified as Underweight, the stock must be expected to underperform its required return by at least 5
112、pptover the next 12 months (or 10ppt for a stock classified as Volatile*). Stocks between these bands are classified as Neutral.Our ratings are re-calibrated against these bands at the time of any material change (initiation of coverage, change ofvolatility status or change in price target). Notwith
113、standing this, and although ratings are subject to ongoing managementreview, expected returns will be permitted to move outside the bands as a result of normal share price fluctuations withoutnecessarily triggering a rating change.*A stock will be classified as volatile if its historical volatility
114、has exceeded 40%, if the stock has been listed for less than 12months (unless it is in an industry or sector where volatility is low) or if the analyst expects significant volatility. However,stocks which we do not consider volatile may in fact also behave in such a way. Historical volatility is def
115、ined as the pastmonths average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating,however, volatility has to move 2.5ppt past the 40% benchmark in either direction for a stocks status to change.15Jan-08Jan-09Jan-10Jan-11Jan-12Jan-13Jan-08Jan-0
116、9Jan-10Jan-11Jan-12Jan-13Jan-08Jan-09Jan-10Jan-11Jan-12Jan-1345%18%656055504540765321ToDate642Jardine Matheson (JM SP)Conglomerates25 January 2013Rating distribution for long-term investment opportunitiesAs of 24 January 2013, the distribution of all ratings published is as follows:abcOverweight (Bu
117、y)(28% of these provided with Investment Banking Services)Neutral (Hold)Underweight (Sell)37%(27% of these provided with Investment Banking Services)(22% of these provided with Investment Banking Services)Share price and rating changes for long-term investment opportunitiesJardine Matheson (JARD.SI)
118、 share price performance USD vs HSBC rating historyRecommendation & price target historyFromOverweight (V)OverweightNeutralTarget PriceToOverweightNeutralOverweightValueDate31 May 20101 August 201117 January 2012Date3530252015Source: HSBCPrice 1Price 2Price 3Price 4Price 5Price 6Price 7Price 8Price
119、940.0041.0046.0054.0058.0060.0058.0060.0058.007 March 201031 May 20101 August 201025 November 201015 June 20111 August 20119 November 20114 March 201230 July 2012Source: HSBCHongkong Land (HKLD.SI) share price performance USD vs HSBC rating historyRecommendation & price target history84Source: HSBCF
120、romNeutral (V)NeutralUnderweightNeutralTarget PricePrice 1Price 2Price 3Price 4Price 5Price 6Price 7Price 8Price 9Price 10ToNeutralUnderweightNeutralOverweightValue4.635.255.405.706.006.505.005.806.107.00Date29 July 20101 October 20108 January 201219 October 2012Date4 March 20102 July 201029 July 20
121、101 October 20103 March 201128 July 20118 January 20124 March 201229 July 201219 October 2012Source: HSBCDairy Farm Intl Holdings (DAIR.SI) share price performance USD vs HSBCrating historyRecommendation & price target historyFrom12108NeutralOverweightNeutralNeutral (V)Target PricePrice 1Price 2Pric
122、e 3Price 4Price 5Price 6OverweightNeutralNeutral (V)NeutralValue8.509.3010.0010.6010.9012.705 March 201025 November 201015 June 201117 January 2012Date25 November 201015 June 201117 January 20122 March 201227 July 201223 January 2013Source: HSBCSource: HSBC16Jan-08Jan-09Jan-10Jan-11Jan-12Jan-13ToDat
123、e1234567891011Jardine Matheson (JM SP)Conglomerates25 January 2013Astra International (ASII.JK) share price performance IDR vs HSBC ratinghistoryRecommendation & price target historyFromabc7710671057104710371027101710710Source: HSBCN/AOverweight (V)NeutralOverweightNeutralOverweightNeutralOverweight
124、NeutralOverweightTarget PricePrice 1Price 2Price 3Price 4Price 5Price 6Price 7Price 8Price 9Price 10Price 11Price 12Price 13Overweight (V)NeutralOverweightNeutralOverweightNeutralOverweightNeutralOverweightNeutralValue5000.005250.006000.005900.006500.007600.007500.008100.007800.007600.007200.007450.
125、007700.0027 May 201020 July 201027 January 201125 April 201115 June 20111 August 201113 October 201112 January 201227 February 201220 March 2012Date27 May 201020 July 201022 October 201027 January 201115 June 20111 August 201113 October 201112 January 201220 March 201216 May 201226 July 201216 Septe
126、mber 201214 January 2013Source: HSBCHSBC & Analyst disclosuresDisclosure checklistCompanyASTRA INTERNATIONALDAIRY FARM INTL HOLDINGSHONGKONG LANDJARDINE MATHESONTickerASII.JKDAIR.SIHKLD.SIJARD.SIRecent price7800.0012.347.8163.50Price Date23-Jan-201323-Jan-201323-Jan-201323-Jan-2013Disclosure1, 52, 7
127、1, 2, 5, 6, 7, 112, 6, 7Source: HSBCHSBC* has managed or co-managed a public offering of securities for this company within the past 12 months.HSBC expects to receive or intends to seek compensation for investment banking services from this company in the next3 months.At the time of publication of t
128、his report, HSBC Securities (USA) Inc. is a Market Maker in securities issued by thiscompany.As of 31 December 2012 HSBC beneficially owned 1% or more of a class of common equity securities of this company.As of 30 November 2012, this company was a client of HSBC or had during the preceding 12-month
129、 period been a clientof and/or paid compensation to HSBC in respect of investment banking services.As of 30 November 2012, this company was a client of HSBC or had during the preceding 12-month period been a clientof and/or paid compensation to HSBC in respect of non-investment banking securities-re
130、lated services.As of 30 November 2012, this company was a client of HSBC or had during the preceding 12-month period been a clientof and/or paid compensation to HSBC in respect of non-securities services.A covering analyst/s has received compensation from this company in the past 12 months.A coverin
131、g analyst/s or a member of his/her household has a financial interest in the securities of this company, asdetailed below.A covering analyst/s or a member of his/her household is an officer, director or supervisory board member of thiscompany, as detailed below.At the time of publication of this rep
132、ort, HSBC is a non-US Market Maker in securities issued by this company and/or insecurities in respect of this companyAnalysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investmentbanking revenue.17123Jardine Matheson (JM SP)Conglomeratesab
133、c25 January 2013For disclosures in respect of any company mentioned in this report, please see the most recently published report on thatcompany available at Legal Entities are listed in the Disclaimer below.Additional disclosuresThis report is dated as at 25 January 2013.All market data included i
134、n this report are dated as at close 22 January 2013, unless otherwise indicated in the report.HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with itsResearch business. HSBCs analysts and its other staff who are involved in the prepara
135、tion and dissemination of Researchoperate and have a management reporting line independent of HSBCs Investment Banking business. Information Barrierprocedures are in place between the Investment Banking and Research businesses to ensure that any confidential and/orprice sensitive information is hand
136、led in an appropriate manner.18Jardine Matheson (JM SP)Conglomerates25 January 2013Disclaimer*Legal entities as at 8 August 2012UAE HSBC Bank Middle East Limited, Dubai; HK The Hongkong and Shanghai Banking CorporationLimited, Hong Kong; TW HSBC Securities (Taiwan) Corporation Limited; CA HSBC Bank
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161、/201319abcConglomerate and Transport (Asia-Pacific)Mark WebbRegional Head of Conglomerate and Transport Research+852 2996 6574Parash JainAnalyst+852 2996 6717Shishir SinghAnalyst+852 2822 4292Stephen WanAnalyst+852 2996 6566Zhe Wei SimAnalyst+852 2996 6602Valerie LawAnalyst+65 6658 0616Dandan YuAnalyst+852 2822 4202Rajani KhetanAssociate+ 852 3941 .hk
