Sim, Dairy Farm

Sim, Dairy Farm: is +3.3% at US$10.90. There is no announcement yet from the co, but a subsidiary of Dairy Farm is reported by Bloomberg to have sold 13.5% (444m shares) of Hero Supermarket (HERO IJ) at Rp 3,100/sh, translating to US$143m. This will reduce Dairy Farm’s stake in Hero to 81%. JPM's current forecasts imply Dairy Farm paying out US$320m in total dividends in FY12e; says this could get a significant lift if the sale proceeds are shared with sh/h. Notes Dairy Farm has traditionally paid out 55-60% of reported profits over the past 5 yrs. The house believes this is slightly positive too for Jardine Matheson (Overwegiht, TP US$67) & Jardine Strategic (Underweight, TP US$30), due to potential flow of dividends up the chain.