Jardine Matheson / Jardine Strategic

Jardine Matheson / Jardine Strategic: Credit Suisse initiates coverage of JM (TP US$70) and JS (TP US$40) with Outperform ratings on both companies; pegs valuations at 25% and 35% discount to NAV. Likes their diversified holdings and are positive on the outlook of their key businesses. Forecasts net profit CAGR of 11-12% from 2011-14e for JM/ JS, led by Astra, Dairy Farm and HK Land, which together make up 77% / 83% of net profit of JM / JS in FY11. Notes JM/ JS have shown consistent earnings growth even during the previous downturns, as the diversified nature of their holdings smooths earnings volatility in their underlying listed subsidiaries. Recall, just yday, JPM also initiated coverage on both JM and JS. Both JS and JM are now trading at all time highs.