Opinions
David Driscoll
Jardine Matheson
JMHLY-OTC
TOP PICK
Jan 11, 2018
Stock price when the opinion was issued
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Are exposed only 25% to China; rather, Indonesia is their greatest exposure where they collet revenues in the Indonesia rupee, but must show profits in US dollars. In the past year, the rupee has fallen then come back, but this isn't reflected in their earnings yet. It will in the next report. If interest rates fall, then the USD will and Jardine's profit will rise. The dividend grows 6-10% yearly (and could rise higher with a weaker USD), paying 5.5% now. It's like a bond proxy. Lots of room to buy companies.
(Analysts’ price target is $54.61)Most revenues come from Indonesia, so the conversion from rupees to US dollars limits profits. 25% of revenues are in China, mostly commercial real estate. Other revenues are also in southeast Asia, also hurt by the strong USD. The dividend is safe and growing at 6.5%.
Emerging markets are suffering as the USD has gone up. China announced stimulus package in September, and asked this company to get the Hong Kong economy rolling again. As a result, stock popped. Earnings not as bad as expected.
Still getting paid to wait, almost like a bond at 6%, and dividend grows every year. Still buying.
In the last 3 weeks, stock's fallen a bit due to the trade imbroglio between US and China. About 25% of revenues from China. Indonesia is their biggest revenue maker, and that's why he uses it as a proxy for all of South East Asia. They have their tentacles everywhere.
Low volatility. With USD falling, emerging market stocks have really done well. So this stock's had a big pickup of 13% YTD. Yield is 5%, which grows roughly 5-10% each year.
US tariffs will hurt its construction and real estate business in China. If China improves, stock should improve. If not, stock will go sideways, and you collect the dividend while you wait.
There are 2 big conglomerates in south east Asia, and this is an easy way for Canadian investors to have access to the south-east market with a big conglomerate. The stock has done nothing for the last 5 years, because of the rise in the US$. They report their numbers in US$, but currencies in Indonesia, China, etc. have been falling, so they’ve been hurt. This has a clean balance sheet and they can make acquisitions. 10-year dividend growth rate has been 15%. Dividend yield of 2.5%. (Analysts' price target is $67.)