John Witt, group managing director of Jardine Matheson Holdings, has increased his stake in the company. On June 17, Witt acquired 50,000 shares of the company on the open market for US$2.5 million ($3.46 million) in total, or US$50.06 each, according to a June 20 regulatory filing.
Witt joined the Hong Kong-based conglomerate back in 1993. From 2016, he was Jardine’s group finance director, before assuming his current role in June.
Graham Baker, who succeeded Witt as group finance director, also increased his stake in the company. On May 11, Baker acquired 564 shares for US$52.77 each. Most recently on June 15 and 16, he again acquired 7,500 shares open market on both days at US$53.056 each, costing him in total US$802,769.
Jardine Matheson is the lead listed entity of the Jardine conglomerate that consists of several other listed companies. The entire group’s business spans from developing properties to running supermarkets to selling motorcycles.
The purchases by Jardine’s directors were made around June 16 when reports emerged that a group of former minority shareholders of Jardine Strategic had filed a suit against JP Morgan in New York to force them to turn over records related to its advisory role in the US$5.5 billion buyout of Jardine Strategic by Jardine Matheson last year.
Last March, Jardine Matheson offered US$33 per share for the remaining 15% of Jardine Strategic it did not already own, purportedly to streamline the cross-holding structure of the conglomerate. The deal was completed the following month with the delisting of Jardine Strategic.
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According to the suit filed by the three Jardine Strategic shareholders, the deal was “coercive and fundamentally unfair” to them. They believed that Jardine Matheson’s offer of US$33 per share undervalues minorities’ 15% of Jardine Strategic by US$1 billion.
Jardine Strategic and Jardine Matheson traditionally trade at a significant discount to their book values because of the conglomerate discount applied by the market, plus the cross-holdings. As at Dec 31, 2020, Jardine Strategic’s net asset value per share was US$58.22, versus the offer price of US$33. As at Dec 31, 2021, Jardine Matheson’s net asset value per share was $102.87, double its current share price of around US$50.
In its interim management statement for 1QFY2022 ended March, Jardine Matheson reported that the quarter saw “positive recovery”, with major subsidiaries Astra International, Hongkong Land, Jardine Cycle & Carriage and the motors business all delivering higher profits. However, other subsidiaries like Jardine Pacific suffered a y-o-y decline while the bottom lines of DFI Retail and Mandarin Oriental were “broadly flat”.
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“Overall, the group’s outlook continues to be uncertain, reflecting both the challenges it faces — including Covid-19 restrictions in China — and the good recovery opportunities for many of our businesses in Southeast Asia,” the company says.
At its May 5 AGM, shareholders approved the cancellation of 426.9 million shares as part of a reduction in capital, which “constituted the final stage in the group simplification” that started last March with the privatisation of Jardine Strategic. As at May 18, Jardine Matheson has an issued share capital of 289.4 million units.
In the year ended December 2021, the company reported earnings of US$1.88 billion, reversing from a loss of US$394 million in FY2020.
HRnetGroup buyback
HRnetGroup is keeping up with its $30 million share buyback programme that was announced on June 13. On the same day, it had acquired 200,000 shares for 76.43 cents each.
On June 15, 17 and 20, HRnetGroup acquired 136,300 shares for 77.72 cents each, 28,200 shares for 76.68 cents each, and 28,900 shares for 77.39 cents each.
On June 21 and 22, the company again acquired 19,000 shares at 77.41 cents each and 79,000 shares at 77.55 cents each respectively. This brings the total number of shares bought back to 491,400 units which were acquired at a total of around $379,000.
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In his June 16 report, RHB analyst Jarick Seet calls HRnetGroup’s share buyback programme a “very strong statement” from the company. “We believe this signals strong conviction from management, which views its stock as undervalued,” says Seet, who has a “buy” call and $1.01 target price on the stock.
“We believe HRnetgroup is a decent proxy to the global economic recovery and is well poised to post solid FY2022 (ending December) results,” he adds.
