Jardine Matheson Holdings will buy back US$500 million of its own shares by the end of next year as the Hong Kong company lays out targets for its transformation from a long-term owner-operator into an active investor more akin to a private equity fund.
Jardine also wants to grow its annual dividend by at least 5% a year through to 2030 and deliver at least 9% annual growth in total shareholder return, it said in a statement Tuesday.
While the announcement offers the first public look at its financial targets, investors have already gleaned some initial details on the direction of the roughly 194-year-old empire, currently led by Chairman Ben Keswick and Chief Executive Officer Lincoln Pan.
Jardine is looking at divesting some of its decades-old holdings including restaurant chains, properties and car dealerships. At the same time, it’s made forays into new growth sectors such as the medical industry as it pushes forward with a business revamp.
The shift comes as Hong Kong’s storied conglomerates seek to adapt for the modern era, with a younger generation of heirs taking the helm at a time of unprecedented geopolitical headwinds and disruptive technological developments. Jardine’s overhaul coincides with a similar rethink for billionaire Li Ka-shing’s CK Hutchison Holdings, where eldest son Victor Li announced a series of divestments worth at least US$41 billion to reshape the empire.
Jardine has set a goal of achieving at least US$200 million in profit after tax and minority interests from new acquisitions, according to the statement. The group said it will be targeting firms based in the Asia Pacific with market leading positions and the ability to adopt technology including artificial intelligence.
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To fund its investments, the group is planning to recycle at least US$4 billion capital from its portfolio companies, excluding its property unit and Indonesian conglomerate, through 2030.
Jardine is actively looking at deals as part of its overhaul. Its restaurant unit has been seeking to sell its KFC and Pizza Hut chains in Asian markets including Hong Kong and Taiwan, attracting bidders including Carlyle Group Inc and Yum China Holdings Inc, Reuters reported in May.
The company is exploring a sale of its car dealership in Malaysia and Singapore, Bloomberg News has reported. It’s also put at least US$1.8 billion worth of Hong Kong property up for sale over the past year, data compiled by Bloomberg show.
The group is still considering more asset sales, including the remainder of an office tower in Hong Kong which was partly sold to Alibaba Group Holding and Ant Group Co for HK$7.2 billion, as well as the company’s Mercedes-Benz dealership business in Hong Kong and Macau, Bloomberg News reported last month.
