| | | Hi all, Im new on this great forum.
Im from Asia so I can try help with some of the firms mentioned here.
Swire Vs Jardine
2 really distinct entities, very little similarities.
Swire as you correctly mentioned is largely focused on real estate (operator and landlord) for all segments including hotels in China and Cathay is not exactly deadweight, though very volatile. The development arm spun off to Swire Properties. The industries they are in are largely cyclicals and basic industries which is prone to external shocks of which there has been a few recently which led to the flattish earnings and I suppose the corresponding stock price.
On the other hand, Jardine focuses more on consumer related items like convenience stores, more a landlord than a developer (via HK land) and has cross holdings in between its 2 listed arms JSH and JMH. It also has a huge exposure to Indonesia through JC&C, which is held by JS. Growth has been exponential on all fronts and hasnt really taken a break yet.
The nature of the industries coupled with the geographical exposures leads to different growth profile. But do not that it also brings a different risk. For example, Keswicks have been upping stakes in JC&C and when the Rupiah fell sharply this year recently, so did Astra which is owned by JC&C as they are denominated in USD.
In absolute terms I do think Swire Pacific does look cheap versus Jardines in peripheral terms. 8x pe and 0.6xpb versus 11x and 0.9x for JMH. For the former, there are issues and management needs to fix them, but unfortunately they do seem a bit slow on things. Its a case of buying a dollar for 50 cents or buying a dollar to let it grow to $1.50 and it seems that the discount for Swire does need to be more distinct to warrant some action. |
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