BILLION DOLLAR CLUB: AUTOMOBILES & AUTO PARTS + TRANSPORTATION
Jardine Cycle & Carriage (Jardine C&C) has emerged as the overall winner in this year’s Billion Dollar Club for the Automobiles & Auto Parts + Transportation sector. It came out tops for two of the three categories: growth in profit after tax with a CAGR of 16.5% over three years as well as weighted ROE of 9.66%.
Jardine C&C is one of a group of listed entities that form the Jardine conglomerate with the main holding company Jardine Matheson owning 76% of Jardine C&C.
By and large, each of these entities has a main business focus area. For example, Hongkong Land is in property development and investment while Mandarin Oriental focuses on operating and owning hotels. DFI Retail Group, previously Dairy Farm International, operates supermarkets and convenience stores and F&B outlets.
In contrast, Jardine C&C has a more diversified business than its sister companies with its key focus on the Asean market while its sister companies are Hongkong-based.
Jardine C&C has significant interests in Vietnam, including 26.6% in Truong Hai Auto Corp — otherwise known as Thaco Corp — a leading vehicle manufacturer in Vietnam which produces not just family cars but also light trucks and buses via joint ventures with leading Korean brand Kia and Japanese brand Mazda.
In 2020, Thaco entered the light motorcycle market. In 2021, the company underwent significant diversification when it acquired the Vietnamese retail operations of an e-mart.
Besides Thaco, Jardine C&C owns stakes in a couple of other key Vietnamese companies: 33.2% of Refrigeration Electrical Engineering Corp and 10.6% of Vinamilk.
Across the border in Thailand, Jardine C&C owns 25.5% of Siam City Cement, which besides its home base of Thailand, is also present in Vietnam, Sri Lanka, Cambodia and Bangladesh.
Another key asset of Jardine C&C is Cycle & Carriage, which distributes vehicle brands including MercedesBenz, Mitsubishi, Kia and Citroen in Singapore, Malaysia and Myanmar. Jardine C&C also owns 46.2% of Tunas Ridean, a used-car dealer operating in Indonesia.
However, the crown jewel of Jardine C&C has to be its 50.1% interest in Astra, a diversified group in Indonesia, which is also the largest independent automotive group in Southeast Asia, distributing brands ranging from Toyota to Daihatsu, Isuzu, Peugeot and even BMW.
Besides an adjacent business of vehicle financing, Astra has extended its reach into other business areas ranging from mining and construction to IT services to infrastructure and logistics. The pace of diversification has picked up recently.
In FY2021, Astra invested US$35 million ($49.9 million) in Halodoc, a healthcare-based technology platform. It also spent US$114 million to acquire stakes in two toll roads in Java. It teamed up with sister company Hongkong Land to acquire the remaining 33% stake in Astra Modern Land, the developer of the Asya residential township in East Jakarta, for US$70 million. More recently, in February, Astra set up a joint venture with Logos to develop and manage modern logistics warehouses in Indonesia.
In FY2021, Astra contributed US$655 million to Jardine C&C’s underlying profit, compared to US$309 million in the previous year, reflecting improved performances, particularly from its automotive, financial services, heavy equipment and mining, and agribusiness operations. This helped to drive Jardine C&C’s overall earnings to US$661 million in FY2021, up 22% from US$540 million in FY2020.
“The pandemic remains a significant risk to performance in 2022, but the group is optimistic about the longterm economic prospects for Southeast Asia and is well-placed to benefit from its growth opportunities,” says chairman Ben Keswick.
The stock within this industry sector that delivered the best returns for shareholders was Sri Trang Agro, which scored a 26% CAGR over three years. The Thailand-based rubber giant has a strong presence, both upstream as a plantation owner of 7,200ha, and midstream with its 34 processing facilities in Thailand, Indonesia and Myanmar.
The company, which was first to be listed on both the Stock Exchange of Thailand and the Singapore Exchange, has a total production capacity of 2.81 million tons per annum. In 2021, Sri Trang claims a market share of 10% of global natural rubber consumption and 30% of Thailand’s total production, up from 26% in 2020.
The company has a separately-listed subsidiary Sri Trang Gloves (Thailand), which has the capacity to produce 40.3 billion pieces of gloves per year. The output is exported to over 170 countries, owning 7% of the market in 2021.
Sri Trang has enjoyed a ride on the commodities boom in recent years. The pandemic has also lifted demand for gloves, lifting the company’s financials to an all-time high. In FY2020 ended December 2020, the company recorded earnings of THB9.5 billion. This surged to nearly THB15.9 billion ($592 million) in FY2021. Revenue in the same period grew from THB75.7 billion to THB118.3 billion.
CENTURION CLUB: AUTOMOBILES & AUTO PARTS + TRANSPORTATION
Samudera Shipping makes clean sweep of Centurion awards
Samudera benefitted from the logistics boom amid the pandemic / Photo: Bloomberg
Samudera Shipping made a clean sweep of all three award categories as Centurion Club winner of the Automobiles & Auto Parts + Transportation category, making it the overall sector winner as well. It recorded a CAGR of 76.2% in returns to shareholders over the three years under review, and PAT growth and ROE of 149.6% and 26.55% respectively.
Samudera is an Indonesia-based shipping line. The company, just like the entire shipping industry, benefitted from the logistics boom amid the pandemic, when disruptions in global supply chains jacked up demand for shipping services. Freight rates shot up in tandem and the various shipping lines managed to record outsized earnings.
In FY2021 ended December 2021, Samudera recorded a revenue of US$527 million ($752 million), up 51.5% over FY2020’s US$348 million. Earnings in the same period surged from US$7.23 million in FY2020 to US$128.6 million for FY2021.
To reward shareholders, the company paid out a total dividend of 14 cents per share, versus just 1.05 cents for FY2020. Samudera was incorporated in 1993 and operates container ships serving various customers across the region. It operates bulk carriers and tankers too.
With supply-chain disruptions expected to persist, the company has added to its fleet in order to capture the higher demand. “In the year ahead, the group will continue its tried-and-tested strategy of remaining nimble and resilient, while executing cost management measures and investment plans prudently and with due consideration of the prevailing operating environment. It will also continue to work closely with its partners and customers to meet their requirements amid the on-going challenges," says Samudera.