Asia Pacific Equity Research

10 December 2009

Jardine Matheson/Jardine JARD.SI, JM SP

Overweight
$29.78
Strategic Price Target: $36.00

2010 earnings recovery expected; valuations still look JSH.SI, JS SP

Overweight
attractive $17.38
Price Target: $22.21

• We are raising our forecasts for Jardine Matheson’s core earnings by Hong Kong
5%/4% for 2009/2010, respectively, due to increases in our forecasts Singapore
for Astra and HKLand. We now expect slight earnings growth in 2009, Conglomerates & Multi-industry
compared to our previous forecasts for a decline, and an 18% earnings Steven Li, CFA
AC

recovery in 2010. (852) 2800-8598

[email protected]
• Our Dec-10 price targets for Jardine Matheson (JM) and Jardine J.P. Morgan Securities (Asia Pacific) Limited
Strategic (JS) are $36 and $22.21, respectively. Our $36 JM price Billy Ng, CFA
target is based on a forward P/E of 12x, slightly above the long-term (852) 2800-8597
average P/E of 11x. Our $22.21 JS price target is based on it trading at [email protected]
its long-term NAV discount of 39% to our forecast year-end 2010 J.P. Morgan Securities (Asia Pacific) Limited
NAV. Joanne Cheung
(852) 2800-8596
• We visited the company in November and believe the trading [email protected]
statement published on 12 November gives the best guidance for the J.P. Morgan Securities (Asia Pacific) Limited
group’s outlook. In our view, 2010 should see improving performance
Christopher Gee, CFA
for most of JM’s businesses. (65) 6882-2345
[email protected]

J.P. Morgan Securities Singapore Private

Limited

JM: Share price performance

Based=100
200
180
160
140
120
100
80
60
1/1/2009 3/1/2009 5/1/2009 7/1/2009 9/1/2009 11/1/2009

Reuters: JARD.SI, Bloomberg: JM SP JARDINE MATHESON HLDGS LTD HANG SENG INDEX

US$ in millions, year-end December Source: Bloomberg

FY08 FY09E FY10E FY11E ADR NA
Jardine Pacific 116 97 116 127 52-week range US$15.56-32.4 Reuters NA
Jardine Motors 44 32 41 46 Market cap (US$MM) 19,002 Bloomberg NA
JLT 38 37 45 48 Shares outstanding (MM) 638 52-wk range NA
Dairy Farm 202 222 251 283 Avg daily value (US$MM) 5.8 Ratio NA
HKLand 145 241 277 259 Avg daily volume 0.2MM shares Avg daily volume NA
Mandarin Oriental 42 6 20 26 Index: Hang Seng Index 21,742 Current discount (%) NA
Astra 238 218 261 306 Exchange rate HK$7.78/US$1.00 13-wk avg discount (%) NA
JCNC ex-Astra 24 22 25 26 52-wk avg discount (%) NA
Corporate & others -26 -32 -39 -43
Core Profit 823 843 998 1,078
Core EPS 2.33 2.36 2.77 2.99
Core P/E (x) 12.8 12.6 10.8 10.0 Performance 1m% 3m% 12m%
DPS 0.75 0.75 0.85 0.89 Absolute -2.7 4.1 81.8
Div yield (%) 2.5 2.5 2.9 3.0 Relative -0.6 -0.2 34.4
Source: Company, Bloomberg, J.P. Morgan estimates. Pricing as of 9 December, 2009

See page 12 for analyst certification and important disclosures, including non-US analyst disclosures.
J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision.
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

Company Description NAV sensitivity metrics

(impact on JM’s see-through NAV) impact (%)
Share price of DFI
Jardine Matheson (JM) is an Asian conglomerate with Impact of +5% 1.6%
significant exposure to private consumption in Hong Impact of +10% 3.1%
Kong and ASEAN. JM has interests in retail and Share price of HKL
restaurants (Dairy Farm), hotels (Mandarin Oriental), Impact of +5% 1.4%
property (Hongkong Land), auto retailing/manufacturing Impact of +10% 2.8%
(Cycle & Carriage), auto retailing (Jardine Motors) and Share pricesof JCNC
financials. JM also has a controlling stake in Astra Impact of +5% 1.2%
International thru JCNC. JM maintains a cross-holding Impact of +10% 2.3%
structure with Jardine Strategic (JS), in which JM owns
Source: Datastream, J.P. Morgan estimates
81% of JSH and JS has a 54% stake in JM.
Price target and valuation analysis
Our Dec-10 Jardine Matheson price target of $36 is based
on a 12m forward P/E of 12x. This is only slightly above
the long-term average of 11x. We believe the stock can re-
rate as we head into an economic recovery. This price
NAV breakdown target implies roughly 20% upside from the current price.
Fundamental risks to our price target on the downside
Jardine Lloyd
Others Jardine Pacific Thompson include a sudden decline in Asian consumer demand. Our
5% 3% Jardine Motors
4%
1%
Dec-10 price target for Jardine Strategic is $22.21 based on
C&C JS trading its long-term average discount of 39% to our
23%
forecast year-end 2010 NAV of $36.41. The current NAV
DF discount is wider than average. We believe the discount
31% can narrow as the NAV rises. Risks to our price target
MOI
5% include a further widening of the NAV discount and a
decline in the market value of JS’ investments, perhaps due
HKL
to a downturn in Asian consumption.

Source: Company, Datastream, J.P. Morgan estimates

EPS: J.P. Morgan vs consensus

J. P. Morgan Consensus
FY09E 2.36 2.44
FY10E 2.77 2.76

Source: IBES, J.P. Morgan estimates

2
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

New $36 Dec-10 price target for Jardine Matheson

We are publishing, for the first time, our Dec-10 price target for Jardine Matheson
(JM). It is $36, which is based on a 12m forward P/E of 12x. This is only slightly
above the long-term average of 11x (Figure 1). We believe the stock can re-rate as
we head into an economic recovery. This price target implies roughly 20% upside
from the current price. Fundamental risks to our price target on the downside include
a sudden decline in Asian consumer demand.

Figure 1: Jardine Matheson: 12-month forward P/E is at long-term average

60

50

40

30 current = 11x
+2 std dev
20 +1 std dev

av g=11x
10
-1 std dev
0
1/4/1991 1/4/1994 1/4/1997 1/4/2000 1/4/2003 1/4/2006 1/4/2009

Source: Bloomberg, J.P. Morgan estimates.

Forecasts increased due to Astra and HKLand

We raise our 2009/2010 forecasts for JM’s underlying profits by 5%/4%,
respectively. This is due to upwards revisions that we have made at Astra
International, largely due to expectations for stronger vehicle sales, and HKLand, due
to higher bookings of profits from property sales.

Figure 2: Jardine Matheson price/book ratio is slightly above long-term average

2.5

2 current = 1.2x
+2 std dev
1.5 +1 std dev

av g=1.1
1

-1 std dev
0.5

0
1/11/1991 1/11/1994 1/11/1997 1/11/2000 1/11/2003 1/11/2006 1/11/2009

Source: Bloomberg, J.P. Morgan estimates.

3
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

Our price target implies a price/book value of roughly 1.3x forecast year-end 2010
book value. This would be above JM's long-term average price/book value (Figure
2), but not significantly so.

Current valuations are not excessive

JM’s current valuations do not appear to be excessive. JM is being valued very near
its long-term averages on most metrics, such as “see-through NAV discount” (see
Figure 3).

Figure 3: Jardine Matheson's "see through" NAV discount is near the average
-19

-24
+1 std dev
-29

-34
av g=-33%

-39
-1 std dev
-44 Current = -33%

-49
Aug Nov Feb May Aug Nov Feb May Aug Nov Feb May Aug Nov
06 06 07 07 07 07 08 08 08 08 09 09 09 09

Source: Bloomberg, J.P. Morgan estimates.

Given that we expect a significant earnings recovery in 2010, we believe JM’s

valuations have the potential to rise further. It’s NAV, book value and earnings are
likely to rise above current levels in 2010.

NAV should rise in 2010

JM’s “see-through” NAV, which values its stake in Jardine Strategic (JS) at the
values of its holdings in its listed investments, continues to be dominated by Dairy
Farm, HKLand, and Jardine Cycle and Carriage. These three stocks comprise 83% of
the “see-through” NAV (Table 1), and we believe all three are likely to rise in value
during 2010. Some of the relatively small companies, such as Motors, Pacific and
Mandarin, are also more cyclical, and should also see an increase in value in 2010, in
our view.

4
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

Table 1: JM’s see-through NAV dominated by Dairy Farm, HKLand and JCNC
Jardine Matheson's NAV
% No. of Valuation Sh. price Total % of Notes:
owned shares held method US$ US$m GAV

Direct
Jardine Pacific n.a. 100 n.a. PER n.a. 765 5% 9x 09 Earnings
Jardine Lloyd Thompson 214.3 32 68 Market 7.28 496 3%
Jardine Motors n.a. 100 n.a. PER n.a. 192 1% 8x 09 Earnings
Other investments 100 1%

Indirect
Dairy Farm 63 851 Market 6.00 5,108 32%
HKLand 41 911 Market 4.83 4,401 28%
Mandarin Oriental 60 594 Market 1.37 814 5%
Jardine Cycle and Carriage 56 199 Market 18.08 3,595 23%
Rothschilds Continuation Holdings AG 17 Cost 147 1%
NT Butterfield 3 Market 4 0%
Asia Commercial Bank 6 Market 83 1%
Schindler Market 65 0%
Other (Tata Power, etc.) Other 164 1%
Net liabilities/assets 120 d. Include attributable JSH
corporate level debt
Net asset value 16,054 100%
JM's shares not owned by JM 360
NAV per share, US$ 44.54
Discount to NAV, % (33%)
29.78
Source: Bloomberg, J.P. Morgan estimates.

New Dec-10 $22.11 price target for Jardine Strategic

Our new Dec-10 price target for JS is $22.21; this is based on JS trading its long-
term average discount of 39% to our forecast year-end 2010 NAV of $36.41. As
shown below, the current NAV discount is wider than average. We believe the
discount can narrow as the NAV rises. However, we acknowledge that JS remains
relatively illiquid, which makes it difficult for many to invest in the stock.

Figure 4: Jardine Strategic: NAV discount is one standard deviation wider than normal
0%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
-10%

Current: -45%
-20%

-30% +1 std dev

av g= -39%
-40%

-1 std dev
-50%
-2 std dev

-60%

Source: Bloomberg, J.P. Morgan estimates.

While our JS target price implies more upside than that for JM, we believe most
investors will likely prefer JM due to its greater liquidity. Risks to our JS price target

5
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

include a further widening of the NAV discount and a decline in the market value of
JS’ investments, perhaps due to a downturn in Asian consumption.

Table 2: Jardine Strategic NAV discount = 45%

Jardine Strategic's NAV
Shares No. of % Valuation Price Total % of Notes:
Outstanding shares held owned method US$ US$m GAV

Listed holdings
Dairy Farm 1348 1,051 78 Market 6.00 6,306 32%
Mandarin Oriental 991 734 74 Market 1.37 1,005 5%
Hong Kong Land 2249 1,125 50 Market 4.83 5,433 27%
Cycle & Carriage 356 245 69 Market 18.08 4,438 22%
Jardine Matheson 638 343 54 Market 29.78 2,042 10%

Investments
Rothschilds Continuation Holdings 21 Cost n.a. 182 1%
AG
NT Butterfield 30 1 4 Market 3.95 4 0%
Asia Commercial Bank 781 55 7 Market 1.88 103 1%
Schindler 1 Market 73.38 80 0%
Other (Tata Industries, etc.) Various 203 1%
Gross asset value 19,797
Net liabilities/assets 2 net "corporate
level" debt
Net asset value 19,799 100%
NAV per share, US$ 31.66
JS's shares not owned by JS (after 625
accounting for crossholding)
Discount to NAV (45%)
Share price 17.38
Source: Bloomberg, J.P. Morgan estimates.

2010 recovery expected

Overall, we believe operating conditions at JM will continue to improve as the
region’s economies continue to recover in 2010. We visited the company in
November, and we believe the trading statement released on 12 November and re-
printed below provides the best summary of JM's outlook. Among the main
businesses, we believe Dairy Farm will continue to see steady growth amid rising
consumption in the region. HKLand is expected to benefit from the 10% increase in
spot rental rates and capital values that we are forecasting for HK Central office
property in 2010, while Astra has the highest operating leverage among the larger
group companies. Among the other companies, Jardine Pacific has a number of
cyclical businesses in the restaurant, transport-related and construction-related
sectors; we expect these to see increased demand in 2010. Luxury car demand has
remained surprisingly strong through 2009, and Jardine Motors should benefit in
2010 from the launch of new models. We believe Mandarin continues to see weak
demand and could see its earnings recover later than those in other sectors.

6
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

Reprint of Jardine Matheson Holdings Limited Interim Management Statement

12th November 2009 – Jardine Matheson Holdings Limited has today issued an
Interim Management Statement covering the period from 1st July to 11th November
2009 in accordance with the requirements of the Disclosure and Transparency Rules
of the Financial Services Authority of the United Kingdom.

While the global economic downturn continues to influence a number of the Group’s
markets, its effects on individual businesses have varied. Improvements have been
seen recently in a number of Jardine Pacific’s businesses, in particular in its
engineering and construction activities. Jardine Motors in the United Kingdom
managed a difficult market well, while its Hong Kong and mainland China
businesses have seen increased demand following new product launches. Jardine
Lloyd Thompson is producing a satisfactory performance in the face of soft
insurance rates.

Hongkong Land’s commercial property interests are performing well as the Hong
Kong market shows signs of stabilizing, and its results will include the recognition of
profits on the completion of residential developments. Dairy Farm’s major retail
businesses continued to show growth, with challenges in certain sectors. Further
store expansion was achieved, and the group continues to enjoy low levels of net
debt. In the face of weakness in both the corporate and leisure segments, occupancy
levels and average room rates remained poor at Mandarin Oriental’s hotels. Astra’s
performance reflects the strength of the Indonesian economy with good automotive
sales and improved results from a number of its other businesses.

With net debt remaining low and the Group’s overall trading conditions becoming
more positive, Jardine Matheson’s financial position is strong. The Group’s earnings
have continued to improve and for the period under review are ahead of 2008.

7
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

Jardine Matheson: Summary of Financials

Profit and Loss statement Cash flow statement

USD in millions, year-end FY06A FY07A FY08A FY09E FY10E USD in millions, year-end FY06A FY07A FY08A FY09E FY10E
Dec Dec

Jardine Pacific 103 115 116 97 116 EBIT 1,315 1,781 1,697 1,740 2,059
Jardine Motors 67 63 44 32 41 Depreciation & amortisation 403 479 520 600 690
JLT 28 33 38 37 45 Change in working capital 472 77 -409 -200 -200
Dairy Farm 131 161 202 222 251 Taxes -370 -295 -443 -375 -450
HK Land 85 131 145 241 277 Cash flow from operations 1,942 2,198 2,156 2,158 2,435
MOL 27 47 42 6 20
Astra 0 178 238 218 261 Disposal/ (purchase) -390 -736 -1,727 -263 -1,650
JCNC ex Astra 114 22 24 22 25 Free cash flow 1,552 1,462 429 1,895 785
Corporate & other int -25 -31 -26 -32 -39
Core profit 530 718 823 843 998 Debt raised/ (repaid) -472 -1,437 201 -100 0
Shares outstanding (diluted) 353 354 353 358 360 Dividends paid -334 -416 -555 -571 -592
Core EPS ($) 1.50 2.03 2.33 2.36 2.77 Beginning cash 1,684 2,491 2,082 2,218 3,606
DPS ($) 0.50 0.65 0.75 0.75 0.85 Ending cash 2,491 2,082 2,218 3,606 3,913
Div Payout Ratio 0.33 0.32 0.32 0.32 0.31 DPS 19.823 14.692 12.780 12.641 10.754

Balance sheet Ratio Analysis

USD in millions, year-end FY06A FY07A FY08A FY09E FY10E %, year-end Dec FY06A FY07A FY08A FY09E FY10E
Dec

Cash and cash equivalents 2,528 2,133 2,248 3,636 3,943 Net profit growth 14.4 35.3 14.6 2.5 18.3
Accounts receivable 2,170 2,322 2,188 2,297 2,412 Core EPS growth 13.5 34.9 15.0 1.1 17.6
Inventories 1,478 1,610 1,960 2,058 2,161
Others 144 175 84 980 1,030 Net debt to total capital 0.5 0.3 0.3 0.5 0.5
Current assets 6,320 6,240 6,480 8,971 9,546 Net debt to equity 43.7 22.1 20.9 43.6 42.5
Assets/equity 3.1 2.6 2.7 4.0 3.9
Fixed assets 2,931 3,149 3,310 3,310 3,310 ROE 8.0 8.5 10.0 9.6 10.5
Investment in associates 6,476 7,964 7,807 4,500 4,700
Total assets 20,378 22,213 22,098 35,272 37,179

Liabilities
ST loans 2,527 1,353 1,369 1,469 1,469
Payables 2,850 3,375 3,493 3,668 3,851
Others 171 298 291 6,050 6,281
Total current liabilities 5548 5026 5153 11187 11601
Long term debt 2882 2653 2602 6000 6500
Other liabilities 845 836 795 4000 4300
Total liabilities 9275 8515 8550 21187 22401
Shareholders' equity 6594 8490 8248 8786 9478
BVPS 18.627 24.051 23.299 24.378 26.297
Source: Company, J.P. Morgan estimates.

8
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

Jardine Strategic: Summary of Financials

Profit and Loss statement Cash flow statement

HKD in millions, year-end USD in millions, year-end
Dec FY07A FY08E FY09E FY10E Dec FY07A FY08E FY09E FY10E

Jardine Matheson 130 119 219 264 EBIT 1,484 1,574 1,837 2,192
Dairy Farm 201 250 275 310 Depreciation & amortisation 450 490 520 550
HK Land 163 179 300 349 Change in working capital 93 -279 -250 -200
MOL 59 52 7 24 Taxes -267 -407 -400 -450
C&C 249 322 294 351 Cash flow from operations 2,044 2,190 2,007 2,472
Others 0 17 10 12
0 0 0 0 Disposal/ (purchase) -569 -1,651 -470 -1,760
Corporate and other interest -79 -80 -90 -100 Free cash flow 1,475 539 1,537 712
Core Profit 723 859 1013 1210
Debt raised/ (repaid) -908 134 0 0
Shares outstanding 618 618 625 625.362 Dividends paid -289 -395 -435 -458
Core EPS 1.17 1.39 1.62 1.93 Beginning cash 2,491 1,554 1,882 3,224
Ending cash 1,554 1,882 3,224 3,617
Core P/E 14.9 12.5 10.7 9.0
DPS 0.18 0.19 0.2 0.21
Div. Payout 15% 14% 12% 11%

Balance sheet Ratio Analysis

USD in millions, year-end %, year-end Dec
Dec FY07A FY08E FY09E FY10E FY07A FY08E FY09E FY10E

Cash and cash equivalents 1,590 1,892 3,224 3,617 Net profit growth 38.5 18.8 18.0 19.4
Accounts receivable 1,957 1,872 2,100 2,300 Core EPS growth 37.6 18.8 16.7 19.3
Inventories 1,225 1,574 1,800 2,000
Others 213 145 185 207 Net debt to total capital 0.3 0.3 0.4 0.4
Current assets 4,985 5,483 7,309 8,124 Net debt to equity 21.5 17.6 34.3 33.6
Assets/equity 2.1 2.1 3.0 3.2
Fixed assets 2,912 3,097 3,600 3,800 ROE 7.4 8.8 9.2 11.0
Investment in associates 7,514 7,440 4,000 4,200
Total assets 20,586 20,749 32,611 35,204

Liabilities
ST loans 1,305 1,281 1,700 1,800
Payables 2,670 2,903 4,000 4,500
Others 231 247 328 360
Total current liabilities 4,206 4,431 6,028 6,660
Long term debt 2,391 2,317 5,300 5,500
Other liabilities 671 664 6179 7546
Total liabilities 7,268 7,412 17,507 19,706
Shareholders' equity 9,787 9,705 10,997 10,950
BVPS 15.8 15.7 17.6 17.5
Source: Company, J.P. Morgan estimates.

9
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

All Data As Of 09-Dec-09

Q-Snapshot: Jardine Matheson Holdings Ltd.

Quant Return Drivers (a Score >50% indicates company ranks 'above average') J.P. Morgan Composite Q-Score
Score 0% (worst) to 100% (best) vs Country vs Industry Raw Value
100% HIGH/STRONGER
Value
P/E Vs Market (12mth fwd EPS) 73% 83% 0.7x C
75%
P/E Vs Sector (12mth fwd EPS) 75% 75% 0.7x O
EPS Growth (forecast) 51% 19% 11.9% U
50%
Value Score 71% 68% N
Price Momentum T
25%
12 Month Price Momentum 45% 48% 93.0% R
1 Month Price Reversion 85% 80% -1.9% Y 0% LOW/WEAKER
Momentum Score 59% 59%
0% 25% 50% 75% 100%
Quality
Return On Equity (forecast) 38% 45% 9.7% INDUSTRY
Earnings Risk (Variation in Consensus) 64% 68% 0.09 Quant Return Drivers Summary (vs Country)
Quality Score 49% 55%
100%
Earnings & Sentiment
Earnings Momentum 3mth (risk adjusted) 87% 64% 115.3 75%
1 Mth Change in Avg Recom. 72% 73% 0.17 50%
Net Revisions FY2 EPS 77% 79% 100% 25%
Earnings & Sentiment Score 84% 81%
0%
COMPOSITE Q-SCORE* (0% To 100%) 82% 76% VALUE PRICE QUALITY EARNINGS

Targets & Recommendations** EPS Revisions** EPS Momentum (%) Historical Total Return (%)
6 Targets Recoms 3.5 14.0 100 93
Consensus Changes (4wks)
Consensus Changes (4wks)

5 3 12.0

(Local Currency %)
80 61
4 2.5 10.0
60
2 8.0
(%)

3 40
1.5 6.0
2 20 8
1 4.0
1 0.5 2.0 0
0 0 0.0 -20 -2
Up Dn Unchanged Up Dn Unchanged -1 Mth -3 Mth 1Mth 3Mth 1Yr 3Yr
FY1 FY2 FY1 FY2
Consensus Growth Outlook (%)
60.0 50.0
50.0
40.0
30.0
20.0 11.9 13.0 14.3
10.0 2.6
0.0
EPS FY1 To FY2 EPS FY2 To FY3 Cash Flow FY1 To FY2 Dividends FY1 To FY2 Sales FY1ToFY2

Closest in Country by Size (Consensus. ADV = average daily value traded in US$m over the last 3 mths)
Code Name Industry USD MCAP ADV PE FY1 Q-Score*
F34-SG Wilmar International Ltd. Agricultural Commodities/Milling 29,448 38.59 17.7 55%
D05-SG DBS Group Holdings Ltd. Major Banks 24,316 63.49 16.3 80%
U11-SG United Overseas Bank Ltd. Regional Banks 21,158 40.36 16.2 70%
O39-SG Oversea-Chinese Banking Corp. Ltd. Major Banks 19,753 31.31 14.5 87%
J37-SG Jardine Strategic Holdings Ltd. Industrial Conglomerates 19,128 3.03 11.3 82%
J36-SG Jardine Matheson Holdings Ltd. Industrial Conglomerates 18,670 5.88 12.1 82%
C31-SG CapitaLand Ltd. Real Estate Development 12,729 53.84 39.6 43%
C6L-SG Singapore Airlines Ltd. Airlines 11,541 16.74 795.3 12%
H78-SG Hongkong Land Holdings Ltd. Real Estate Development 10,684 12.15 15.2 45%
BN4-SG Keppel Corp. Ltd. Industrial Conglomerates 9,727 26.39 11.6 66%
D01-SG Dairy Farm International Holdings Ltd. Food Retail 8,066 1.15 23.6 49%

Source: Factset, Thomson and J.P. Morgan Quantitative Research. For an explanation of the Q-Snapshot, please visit http://jpmorgan.hk.acrobat.com/qsnapshot/
Q-Snapshots are a product of J.P. Morgan’s Global Quantitative Analysis team and provide quantitative metrics summarized in an overall company 'Q-Score.'
Q-Snapshots are based on consensus data and should not be considered as having a direct relationship with the J.P. Morgan analysts’ recommendation.
* The Composite Q-Score is calculated by weighting and combining the 10 Quant return drivers shown. The higher the Q-Score the higher the one month
expected return. On a 14 Year back-test the stocks with the highest Q-Scores have been shown (on average) to significantly outperform those stocks with the
lowest Q-Scores in this universe. ** The number of up, down and unchanged target prices, recommendations or EPS forecasts that make up consensus.

10
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

All Data As Of 09-Dec-09

Q-Snapshot: Jardine Strategic Holdings Ltd.

Quant Return Drivers (a Score >50% indicates company ranks 'above average') J.P. Morgan Composite Q-Score
Score 0% (worst) to 100% (best) vs Country vs Industry Raw Value
100% HIGH/STRONGER
Value
P/E Vs Market (12mth fwd EPS) 77% 86% 0.7x C
75%
P/E Vs Sector (12mth fwd EPS) 87% 87% 0.6x O
EPS Growth (forecast) 47% 15% 9.7% U
50%
Value Score 79% 77% N
Price Momentum T
25%
12 Month Price Momentum 50% 53% 101.6% R
1 Month Price Reversion 71% 67% 1.2% Y 0% LOW/WEAKER
Momentum Score 58% 59%
0% 25% 50% 75% 100%
Quality
Return On Equity (forecast) 36% 42% 8.9% INDUSTRY
Earnings Risk (Variation in Consensus) 56% 59% 0.11 Quant Return Drivers Summary (vs Country)
Quality Score 43% 48%
100%
Earnings & Sentiment
Earnings Momentum 3mth (risk adjusted) 89% 67% 135.0 75%
1 Mth Change in Avg Recom. 34% 41% 0.00 50%
Net Revisions FY2 EPS 77% 79% 100% 25%
Earnings & Sentiment Score 80% 74%
0%
COMPOSITE Q-SCORE* (0% To 100%) 82% 76% VALUE PRICE QUALITY EARNINGS

Targets & Recommendations** EPS Revisions** EPS Momentum (%) Historical Total Return (%)
6 Targets Recoms 3.5 20.0 120 102
Consensus Changes (4wks)
Consensus Changes (4wks)

5 3

(Local Currency %)
100
2.5 15.0
4 80
2
(%)

3 10.0 60 45
1.5
2 40
1 5.0
1 0.5 20 10
1
0 0 0.0 0
Up Dn Unchanged Up Dn Unchanged -1 Mth -3 Mth 1Mth 3Mth 1Yr 3Yr
FY1 FY2 FY1 FY2
Consensus Growth Outlook (%)
20.0
15.6
14.2
15.0 12.3
9.7
10.0

5.0 3.2

0.0
EPS FY1 To FY2 EPS FY2 To FY3 Cash Flow FY1 To FY2 Dividends FY1 To FY2 Sales FY1ToFY2

Closest in Country by Size (Consensus. ADV = average daily value traded in US$m over the last 3 mths)
Code Name Industry USD MCAP ADV PE FY1 Q-Score*
Z74-SG Singapore Telecommunications Ltd. Major Telecommunications 34,434 50.47 12.6 22%
F34-SG Wilmar International Ltd. Agricultural Commodities/Milling 29,448 38.59 17.7 55%
D05-SG DBS Group Holdings Ltd. Major Banks 24,316 63.49 16.3 80%
U11-SG United Overseas Bank Ltd. Regional Banks 21,158 40.36 16.2 70%
O39-SG Oversea-Chinese Banking Corp. Ltd. Major Banks 19,753 31.31 14.5 87%
J37-SG Jardine Strategic Holdings Ltd. Industrial Conglomerates 19,128 3.03 11.3 82%
J36-SG Jardine Matheson Holdings Ltd. Industrial Conglomerates 18,670 5.88 12.1 82%
C31-SG CapitaLand Ltd. Real Estate Development 12,729 53.84 39.6 43%
C6L-SG Singapore Airlines Ltd. Airlines 11,541 16.74 795.3 12%
H78-SG Hongkong Land Holdings Ltd. Real Estate Development 10,684 12.15 15.2 45%
BN4-SG Keppel Corp. Ltd. Industrial Conglomerates 9,727 26.39 11.6 66%

Source: Factset, Thomson and J.P. Morgan Quantitative Research. For an explanation of the Q-Snapshot, please visit http://jpmorgan.hk.acrobat.com/qsnapshot/
Q-Snapshots are a product of J.P. Morgan’s Global Quantitative Analysis team and provide quantitative metrics summarized in an overall company 'Q-Score.'
Q-Snapshots are based on consensus data and should not be considered as having a direct relationship with the J.P. Morgan analysts’ recommendation.
* The Composite Q-Score is calculated by weighting and combining the 10 Quant return drivers shown. The higher the Q-Score the higher the one month
expected return. On a 14 Year back-test the stocks with the highest Q-Scores have been shown (on average) to significantly outperform those stocks with the
lowest Q-Scores in this universe. ** The number of up, down and unchanged target prices, recommendations or EPS forecasts that make up consensus.

11
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

Other Companies Recommended in This Report (all prices in this report as of market close on 10 December 2009)
Astra International (ASII.JK/Rp33,250/Overweight), Hongkong Land (HKLD.SI/$4.83/Neutral)
Analyst Certification:
The research analyst(s) denoted by an “AC” on the cover of this report certifies (or, where multiple research analysts are primarily
responsible for this report, the research analyst denoted by an “AC” on the cover or within the document individually certifies, with
respect to each security or issuer that the research analyst covers in this research) that: (1) all of the views expressed in this report
accurately reflect his or her personal views about any and all of the subject securities or issuers; and (2) no part of any of the research
analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the
research analyst(s) in this report.
Important Disclosures

• Market Maker/ Liquidity Provider: JPMSL and/or an affiliate is a market maker and/or liquidity provider in Hongkong Land.
• Analyst Position: The following analysts (and/or their associates or household members) own a long position in the shares of
Hongkong Land: Steven Li.
• Client of the Firm: Astra International is or was in the past 12 months a client of JPMSI. Hongkong Land is or was in the past 12
months a client of JPMSI; during the past 12 months, JPMSI provided to the company investment banking services. Jardine
Matheson is or was in the past 12 months a client of JPMSI; during the past 12 months, JPMSI provided to the company non-
investment banking securities-related services. Jardine Strategic Holdings is or was in the past 12 months a client of JPMSI.
• Investment Banking (past 12 months): JPMSI or its affiliates received in the past 12 months compensation for investment banking
services from Hongkong Land.
• Investment Banking (next 3 months): JPMSI or its affiliates expect to receive, or intend to seek, compensation for investment
banking services in the next three months from Hongkong Land, Jardine Matheson.
• Non-Investment Banking Compensation: JPMSI has received compensation in the past 12 months for products or services other
than investment banking from Jardine Matheson. An affiliate of JPMSI has received compensation in the past 12 months for products
or services other than investment banking from Jardine Matheson, Jardine Strategic Holdings.
• Broker: An affiliate of J.P. Morgan Securities Ltd. acts as Corporate Broker to Jardine Matheson, Jardine Strategic Holdings.

Astra International (ASII.JK) Price Chart

Date Rating Share Price Price Target

54,054 OW Rp18,500 OW Rp25,000 UW Rp7,700 OW Rp37,00 (Rp) (Rp)
08-Nov-06 OW 14900 17300
OW Rp20,400 N Rp21,200
OW Rp35,000 UW Rp16,700 OW Rp29,000 06-Dec-06 OW 16700 20400
45,045
13-Feb-07 OW 15100 18500
W Rp17,300 OW Rp20,300 N Rp35,000 OW Rp24,000 N Rp11,000
OW Rp28,000
36,036 07-Jul-07 OW 18000 20300
Price(Rp) 09-Oct-07 N 20350 21200
27,027 31-Jan-08 N 27050 35000
01-Feb-08 OW 27250 35000
18,018
08-May-08 OW 21250 25000
04-Jul-08 OW 19300 24000
9,009
11-Sep-08 UW 19300 16700
04-Dec-08 UW 8950 7700
0
Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan
11-Mar-09 N 11300 11000
06 07 07 07 07 08 08 08 08 09 09 09 09 10 20-Jun-09 OW 22050 28000
27-Jul-09 OW 27050 29000
Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst may or may not have covered it 27-Oct-09 OW 33100 37000
over the entire period.
J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

12
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

Hongkong Land (HKLD.SI) Price Chart

8 $3
Date Rating Share Price Price Target
($) ($)
7 OW $5.7 OW $3.2 N $5.2
07-Mar-07 N 4.18 4.80
6 08-Aug-07 N 4.12 4.70
N $4.8 N $4.7 OW $5 N $4.4 N $2.5 OW $2.35 OW $4.6
07-Nov-07 OW 4.64 5.70
5
06-Mar-08 OW 4.30 5.00
Price($) 4 01-Aug-08 N 4.13 4.40
17-Nov-08 N 2.35 2.50
3
06-Mar-09 OW 1.84 2.35
2 18-May-09 OW 2.70 3.20
26-May-09 N 3.38 3.20
1 06-Aug-09 OW 3.99 4.60
01-Dec-09 N 4.95 5.20
0
Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan
06 07 07 07 07 08 08 08 08 09 09 09 09 10

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst may or may not have covered it
over the entire period.
J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Jardine Matheson (JARD.SI) Price Chart

Date Rating Share Price Price Target

OW $34.98 ($) ($)
55
08-Mar-07 OW 21.00 26.00
OW $28 OW $34.56 OW $26.58 30-May-07 OW 24.00 28.00
44
04-Feb-08 OW 25.82 32.48
OW $26 OW $32.48 OW $36.61 OW $23 11-Mar-08 OW 28.00 34.56
Price($) 33 04-Aug-08 OW 30.60 36.61
18-Feb-09 OW 17.26 23.00
22 11-May-09 OW 23.48 26.58
11-Aug-09 OW 29.52 34.98
11

0
Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan
06 07 07 07 07 08 08 08 08 09 09 09 09 10

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst may or may not have covered it
over the entire period.
J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

13
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

Jardine Strategic Holdings (JSH.SI) Price Chart

35 Date Rating Share Price Price Target

OW $18.73 ($) ($)
14-May-08 OW 18.30 20.58
28
OW $20.76 OW $15 04-Aug-08 OW 17.00 20.76
18-Feb-09 OW 9.14 12.50
21 OW $20.58 OW $12.5 11-May-09 OW 12.20 15.00
Price($) 11-Aug-09 OW 16.76 18.73

14

0
Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan
06 07 07 07 07 08 08 08 08 09 09 09 09 10

Source: Bloomberg and J.P. Morgan; price data adjusted for stock splits and dividends.
This chart shows J.P. Morgan's continuing coverage of this stock; the current analyst may or may not have covered it
over the entire period.
J.P. Morgan ratings: OW = Overweight, N = Neutral, UW = Underweight.

Explanation of Equity Research Ratings and Analyst(s) Coverage Universe:

J.P. Morgan uses the following rating system: Overweight [Over the next six to twelve months, we expect this stock will outperform the
average total return of the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] Neutral [Over the next six to twelve
months, we expect this stock will perform in line with the average total return of the stocks in the analyst’s (or the analyst’s team’s)
coverage universe.] Underweight [Over the next six to twelve months, we expect this stock will underperform the average total return of
the stocks in the analyst’s (or the analyst’s team’s) coverage universe.] The analyst or analyst’s team’s coverage universe is the sector
and/or country shown on the cover of each publication. See below for the specific stocks in the certifying analyst(s) coverage universe.

Coverage Universe: Steven Li, CFA: Hutchison Whampoa (0013.HK), Jardine Matheson (JARD.SI), Jardine Strategic
Holdings (JSH.SI), Swire Pacific (0019.HK), Wharf (Holdings) (0004.HK), Wheelock (0020.HK)

J.P. Morgan Equity Research Ratings Distribution, as of September 30, 2009

Overweight Neutral Underweight
(buy) (hold) (sell)
JPM Global Equity Research Coverage 39% 46% 15%
IB clients* 56% 57% 42%
JPMSI Equity Research Coverage 38% 51% 10%
IB clients* 76% 72% 56%
*Percentage of investment banking clients in each rating category.
For purposes only of NASD/NYSE ratings distribution rules, our Overweight rating falls into a buy rating category; our Neutral rating falls into a hold
rating category; and our Underweight rating falls into a sell rating category.

Valuation and Risks: Please see the most recent company-specific research report for an analysis of valuation methodology and risks on
any securities recommended herein. Research is available at http://www.morganmarkets.com , or you can contact the analyst named on
the front of this note or your J.P. Morgan representative.

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various factors, including the quality and accuracy of research, client feedback, competitive factors, and overall firm revenues, which
include revenues from, among other business units, Institutional Equities and Investment Banking.

Registration of non-US Analysts: Unless otherwise noted, the non-US analysts listed on the front of this report are employees of non-US
affiliates of JPMSI, are not registered/qualified as research analysts under NASD/NYSE rules, may not be associated persons of JPMSI,

14
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

and may not be subject to NASD Rule 2711 and NYSE Rule 472 restrictions on communications with covered companies, public
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15
Steven Li, CFA Asia Pacific Equity Research
(852) 2800-8598 10 December 2009
[email protected]

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16