Jardine Matheson

Jardine Matheson: JPM initiates at Overweight with TP US$67.00, tipping an attractive opportunity. Sees JM as a diversified high-quality portfolio of operating businesses offering quality exposure to growth in Asean and Greater China. Notes JM has grown earnings at 23% annually since FY05, raised dividends by 15% p.a., and improved ROCE over the last decade. Adds, JM trades at 11X FY13 P/E, a discount to all its major operating subsidiaries; Given its operating earnings streams, and a healthy growth profile, the house thinks this is unjustified and an opportunity for investors. Sees JM's strong earnings delivery as a key attraction. Prefers JM to Jardine Strategic for its consistently higher dividend, forecasting JM's dividend to grow by 10% p.a. over the next three years. Notes JM's earnings mix is interesting at 40% from Indonesia, but only about 33% in IDR, and 33% from Hong Kong, with the emerging and developed market split about 50:50. JM is up 3.0% at US$60.00. Recall, our 52wk high alerts have been featuring JM for some time now .