Jardine Matheson: China Still Faces Hurdles

2025-03-27 15:28:04 ET

Summary

• Jardine Matheson Holdings Limited shows signs of bottoming in China, but US tariffs pose a meaningful threat to recovery and growth at Astra and for Chinese macro.
• There is general sequential improvement in segment results and deceleration in declines.
• Hongkong Land faces challenges with impairments necessary after the real estate deleveraging, but things do look like they're improving, and they plan to focus more on the rental portfolio.
• Other segments are more non-discretionary like financial services, DFI Retail, logistics and trade as well as the elevator businesses. Operationally Astra has been impressive under pressure.
• Jardine Matheson probably has incrementally less to lose in the emerging market environment than JC&C, so we prefer it since it's underperformed, but both are rather risky.

Jardine Matheson Holdings Limited ( OTCPK:JARLF ) reported decent results. The businesses are for the most part seeing sequential improvement and either acceleration of growth or deceleration of declines. We are still concerned about the traumatic impacts that deleveraging can have on an economy, but it is clear that at least bottoming is happening in China as of the latest results. The issue is that the further tariffs being leveled at countries, both generally and specifically at China, by the US could once again hamper the recovery of the ailing economy....

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