DBS says parent Jardine Matheson a better buy, as it downgrades JMSEA
It says JMH has broader exposure to group’s revamp
DBS Group Research has revised its stance on Jardine Matheson Holdings and its subsidiary, Jardine Matheson Southeast Asia, citing divergent outlooks. Analyst Elizabelle Pang lowered the target price for JMSEA to S$25 from S$35.50 and changed its recommendation to "hold" from "buy". Meanwhile, she maintained a "buy" rating on JMH with a lower target price of US$85, down from US$90.
DBS believes JMH's broader exposure to the group's restructuring efforts and potential for a valuation re-rating outweigh JMSEA's current valuation position. JMH's market-implied holding company discount has widened to about 37%, compared to its long-term average of 32%. The brokerage anticipates the discount could narrow to 25% as the group executes its restructuring plans, including capital recycling, share buybacks, and earnings recovery at Astra International.
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