Jardine Strategic Holdings Limited – The Scotland Hong Kong Connection

Jardine Strategic Holdings

Watch the video with Andrew Stotz or read a summary of the World Class Benchmarking on Jardine Strategic Holdings Limited.

Background

Founded in China in 1832, Jardine Strategic Holdings Limited holds majority stakes in Jardine Matheson (JM SP), Dairy Farm (DFI SP), Hongkong Land (HKL SP), Mandarin Oriental (MAND SP), Cycle & Carriage (JCNC SP) and Astra International (ASII IJ).

Jardine employs a whopping 440,000 people.

The company is controlled by the Keswick family, an uber-wealthy Scottish clan, through Jardine Matheson Holdings. The family is said to be worth £1.7 billion.

Jardine Strategic Holdings

Business Description

JS is active in many business segments, mainly in China and Southeast Asia, accounting for 93% of revenue, through six main subsidiaries. PT Astra International Tbk (ASII IJ)—three main segments are automotive, heavy equipment and mining, and financial services. Dairy Farm International Holdings Limited (DFI SP)—operates in four broad formats: food, health & beauty, home furnishings and restaurants.

Jardine Strategic Holdings

Jardine Matheson Holdings Limited (JM SP)—present in construction, engineering, motor vehicles, and insurance through Jardine Lloyd Thompson Group Public Limited Company (JLT LN). Jardine Cycle & Carriage Limited (JCNC SP)—holds 50% of ASII and includes auto dealerships and financing, engineering and cement segments. Hongkong Land Holdings Limited (HKL SP)—is involved with high-end property investment, management and development. Mandarin Oriental International Limited (MAND SP)—operates 46 deluxe hotels, resorts and residences.

Leadership

Chairman Henry Keswick has remained at the helm since 1989. Having joined the family business in 1961, he is director of Dairy Farm, Hongkong Land and Mandarin Oriental.

Jardine Strategic Holdings

Ben Keswick has been Managing Director since 2012. Since then the company’s Profitable Growth score has improved gradually, although it remains below average.

Since 1998, he has held a number of executive positions, including finance director and then chief executive officer of Jardine Pacific between 2003 and 2007. He has an MBA from INSEAD. He is chairman and managing director of Dairy Farm, Hongkong Land and Mandarin Oriental, managing director of Jardine Matheson and a director of Jardine Pacific and Jardine Motors.

World Class Benchmarking

Profitable Growth has been stuck at #6 since 2014, slightly below average for large Industrials. In fact, Jardine only ranks among the top 840 of 1,400 large industrial companies.

One positive sign is Growth. Growth has surged to #3 from #9 in 2012. Profitability, however, has remained at #6.

Jardine Strategic Holdings

Profit margin has been the primary driver of Profitability, while Asset utilization has been stuck at #9 for five years straight.

Margin Change, coming in at #2, has been one of the few positive details in a sea of mediocrity.

This article first appeared on Become A Better Investor

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About the Author

Dr. Andrew Stotz, CFA
Dr. Andrew Stotz, CFA is the CEO of A. Stotz Investment Research, a company providing institutional investors with ready-to- invest portfolios in Asia that aim to beat the benchmark through superior stock selection. The company also provides buy- and sell-side clients with financial models to value any company in the world and World Class Benchmarking to determine what companies are financially world class. Previously, as Head of Research at CLSA, Andrew was voted No. 1 Analyst in Thailand in the Asiamoney Brokers Polls for 2008 and 2009. He was also voted No. 1 Analyst in Thailand in the 2009 Institutional Investor magazine All-Asia Research Team Report. Andrew earned his PhD in finance at the University of Science and Technology of China in Anhui province, with a focus on answering questions raised by fund managers and analysts during his career about picking stocks and managing portfolios. In addition, Andrew has been a lecturer in finance for 22 years at various universities in Thailand. Since 2013, he has been the president of the CFA Society of Thailand. He is also the author of How to Start Building Your Wealth Investing in the Stock Market.

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