3 Things Investors Should Know About Jardine Strategic Holdings Limited’s Latest 2016 Results

Jardine Strategic Holdings Limited (SGX: J37) is a conglomerate due to its majority interest in many other Singapore-listed companies such as:

  • Jardine Cycle & Carriage Ltd (SGX: C07), which in turn derives most of its results from the Indonesia-based Astra, a conglomerate with interests in areas such as vehicle distribution, financial services, agriculture, mining, and more. Jardine C&C also has its own directly-owned vehicle-distribution arm.
  • Asia-focused real estate investor and developer Hongkong Land Holdings Limited (SGX: H78).
  • Pan-Asian bricks-and-mortar retailer Dairy Farm International Holdings Ltd (SGX: D01).
  • International hotelier Mandarin Oriental International Limited (SGX: M04).

Last week, Jardine Strategic reported its 2016 full year results. Let’s look at three useful pieces of information that investors may want to know from the announcement:

1. The overall result

Here’s a table showing some important numbers from Jardine Strategic Holdings’ income statement and balance sheet for 2016 and 2015:

Jardine Strategic income statement 2016
Source: Jardine Strategic 2016 full year earnings release

On the whole, we can see that Jardine Strategic had a decent year in 2016 – its revenue, underlying profit, profit attributable to shareholders, dividends, and net asset value had all grown.

The lower growth rate in underlying profit as compared to profit attributable to shareholders is because the former strips out the increase in fair value of investment properties. In general, underlying profit measures the recurring profit generated by Jardine Strategic by removing exceptional items.

Meanwhile, the slightly faster growth in underlying earnings per share compared to underlying profit is due to share repurchases made during the year.

2. Subsidiaries’ performance

Here’s a table showing the different sources of Jardine Strategic’s profit attributable to shareholders in 2016 and 2015:

Jardine Strategic segment income statement 2016
Source: Jardine Strategic 2016 full year earnings release

Most of Jardine Strategic’s businesses – with the exception of its property-related businesses, namely Hong Kong Land and Mandarin Oriental – delivered profit growth in 2016.

3. Change in market value of shareholdings

You can see in the table below how the market value of Jardine Strategic’s various holdings have changed from 2015 to 2016 (the numbers given are mostly taken from the actual market capitalisation of the various companies mentioned):

Jardine Strategic segment market value 2016
Source: Jardine Strategic 2016 full year earnings release

There are two things to note here. Firstly, the market value of Jardine Strategic’s listed companies have grown on the whole, leading to a 6.5% increase in its net asset value per share to US$53.25. Secondly, the current market price of Jardine Strategic is US$39.58 per share, which is a big 27% discount to the market value of its various business interests.

In all, 2016 was a positive year for Jardine Strategic has most of its business interests delivered growth. It’s interesting to note that the company is currently trading at a discount to the market value of its ownership stakes in all its various listed companies.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Hongkong Land Holdings and Dairy Farm International Holdings. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.