Jardine Matheson (JARD.SI): Investor Day takeaways: 9% 5-year TSR target with 5% DPS CAGR and US$4bn capital recycling, New US$500mn share buyback program announced

Research evidence excerpt

Jardine Matheson (JARD.SI): Investor Day takeaways: 9% 5-year TSR target with 5% DPS CAGR and US$4bn capital recycling, New US$500mn share buyback program announced

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and the remaining ~25% for share buyback. With only US$14mn left for its

previous share buyback quota, JM announced another new US$500mn

follow-on share repurchase program till end-FY27, of which we estimate around

US$200mn would be used to neutralize scrip dividend as in prior years.

n Target to be a steady compounder. US$4bn capital to be recycled in FY26-30 to

acquire businesses in new pillars generating US$200+mn PATAM - Management

emphasized the importance of its ongoing review of its asset portfolio to support

sufficient business diversification (i.e., geographically, asset light vs. heavy) and good

earnings quality (i.e., stability, recurring vs. cyclical). In doing so, they have set

specific criteria for acquisition targets, i.e., market leader, scalability, control, growth

accretive, path to US$100+mn PATAM, minimum 11% IRR hurdle rate etc.

Management noted its intention is not to position JM as a fast-growing company (at

the risk of significant cyclicality) but rather to remain as a steady compounder that

offers mid-to-high single digit earnings CAGR. As the group continues to diversify

and adjust its portfolio, they believe it would be sensible to have ~15% asset mix in

the faster-growing, more asset-light industries to hedge against asset heavy Astra

and HKLand. While no specific asset divestment was identified, management noted

that assets without control and/or generating sub-7% returns may be candidates for

recycling. Based on media reports and management comments, possible targets

could include its minority stake in Zhongsheng, Jardine Restaurants, One Causeway