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Jardine Matheson Holdings Limited: How Does it Make its Money?

Lawrence Nga
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Jardine Matheson Holdings Limited (SGX: J336) is a conglomerate with interests in the web of Jardines companies which include Jardine Strategic Holdings Limited (SGX: J37) , Jardine Cycle & Carriage Ltd (SGX: C07), Hongkong Land Holdings Limited (SGX: H78), Dairy Farm International Holdings Ltd (SGX: D01), Mandarin Oriental Limited (SGX: M04), Jardine Lloyd Thompson and Jardine Pacific.

From the above, we can see that the company has a wide interest in companies operating in various industries. Given such complexity, investors may find it difficult to understand the company.

Here, I’ll shed some light on one important aspect of the company – how it makes its cash, which will help investors better understand its businesses.

Cheat sheet

Source: Jardine Matheson 2018 Annual Report

The above is a quick overview of the profit contribution from each business towards Jardine Matheson’s overall profitability in 2018.

From the above, we can see that the biggest contributor here is Astra, accounting for 27% of Jardine Matheson’s profits in 2018. As a quick summary, Astra itself is a conglomerate focusing primarily on Indonesia. It operates in various industries that include automobiles, financial services, heavy equipment, mining, construction & energy, agribusiness and more.

Next up we have Hongkong Land, which accounted for 25% of the company’s profit in 2018. Hongkong Land operates mainly in the property development, investment, and management business. Its property businesses are spread across China, Southeast Asia and in its home base of Hong Kong.

The third-largest business within the conglomerate, Dairy Farm, is also a conglomerate in its own right. It operates mainly under four segments: Food, Health and Beauty, Home Furnishings, and Restaurants. In Singapore, Dairy Farm is the owner of stores such as Guardian, Cold Storage, Giant Hypermarket, and 7-Eleven.

The remaining businesses are Jardine Motors, Jardine Pacific, Jardine Cycle and Carriage, Jardine Lloyd Thompson and Mandarin Oriental. Among them, Jardine Motors, Jardine Lloyd Thompson and Mandarin Oriental are simpler businesses focusing on the automobile dealership, insurance, and hotel industry, respectively. The other two are conglomerates that focus on businesses across the Asia region.

Conclusion

Overall, we see that there are a number of moving parts here. Hopefully, by breaking down and understanding the different parts separately, we can help investors better understand the various businesses across the conglomerate. This should help investors make better and more informed investment decisions about Jardine Matheson.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned. The Motley Fool Singapore has recommended shares of Hongkong Land Holdings Limited and Dairy Farm International Holdings.

 

Motley Fool Singapore 2019