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Jardine C&C's offers investors two Asean growth engines: DBS

The Edge Singapore
The Edge Singapore  • 2 min read
Jardine C&C's offers investors two Asean growth engines: DBS
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DBS Group Research has initiated coverage on Jardine Cycle & Carriage with a "buy" call and $38.50 target price, given its two key growth engines driving the industrial development of Indonesia and Vietnam.

JC&C is a "compelling vehicle" for investors keen for some exposure to Indonesia mixed with greater regional diversification, states analysts Elizabelle Pang and Sachin Mittal in their Feb 23 note.

The company, a member of the Jardine conglomerate, is described as a leading investment holding company with strategic exposure to Indonesia and Vietnam, anchored by JC&C’s 50.1% stake in Astra International, an Indonesian conglomerate spanning automotive manufacturing, components, and financial services.

In addition, JC&C owns the Cycle & Carriage (C&C) auto dealership platforms in Singapore (100%) and Malaysia (97.1%).

In FY2024, Indonesia, Vietnam, and regional interests (C&C) accounted for 87%, 9%, and 5% of PATMI, respectively.

Pang and Mittal believe that Astra, for all the recent concerns over Indonesia, will likely report FY2026 earnings more resilient than what the market is now implying.

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Their earnings projection is 4% above consensus, supported by Astra's strong franchise in vehicle sales.

Beyond Astra, JC&C also adds a so-called "Vietnam growth kicker" via its various stakes in companies such as Thaco, which is in auto and manufacturing, as well as others in renewable energy.

Growth catalysts might come from more active capital recycling, such as the recent sale of its 4.6% stake in Vinamilk to Fraser & Neave for $295 million.

See also: Analysts ‘neutral’ on Sembcorp after FY2025 result announcement

Citing JC&C's recent "pivot" to five-year total shareholder return as a "core" KPI should "sharpen capital discipline and shareholder returns.

They are projecting a lift in dividend payout ratio from 40% to 45% in FY2026 and FY2027, driving a 4.5% dividend yield.

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