Jardine Matheson

Jardine Matheson: FY12 broadly inline with Street and mgt guidance. Underlying net profit was US$1,479m, down 1% yoy. DPS was US$1.35, up 8% yoy. Stronger performances at HK Land and Jardine C&C were offset by weaker-than-expected results at Dairy Farm and Jardine Pacific. JM maintained its strong financial position with only 8% net gearing (excluding financial services companies). Mgt expects a more positive business outlook for 2013, and commented that “most of the Group’s businesses continue to trade well.” Analysts however, note that while the medium-term outlook remains strong, profit growth may be lacklustre in the near term due to earnings growth slowdown at Astra, the depreciation of the IDR (versus the USD) and weakness at HACTL. Nomura notes the stock’s share price has risen 4% in the past two days preceding the result announcement. Expects the share to give back some of these gains in the near term, considering that the actual result was only in line. Nevertheless, it views the 2013F recovery story as intact, remains positive on its share performance on a longer term basis. Keeps the stock at Buy with TP $70.40. HSBC maintains a Neutral rating with TP US$68.