Check out Jardine's 6 business boosters

Recovery is right around the corner.

According to Nomura, Jardine’s IMS (interim management statement) released after market indicates an overall steady performance since July, with underlying earnings in line with last year.

Here's more from Nomura:

This is consistent with management’s previous guidance and with our estimate of flat earnings for FY12F. Our investment thesis of a 2013F earnings recovery story is increasingly visible, in our view – we project a 15% recurring EPS CAGR in 2012F-14F driven by Astra (auto sales upside from low-cost green cars) and Dairy Farm (sustainable growth, especially from health and beauty stores). 

Performance of various businesses as presented in the IMS:

(1) Astra – strong car sales to more than offset softer performances elsewhere. Consumer demand for Toyota Agya and Daihatsu Ayla is strong, with backlog orders quickly running to Feb/Mar13. In our view, this should benefit Astra International as their distributor and boost sentiment on the stock.

Stronger-than-expected car sales should offset weakness in the earnings of the agribusiness division and slower growth in the heavy equipment division, we believe.

(2) Dairy Farm – continued good growth momentum. According to DF’s IMS (issued 7 Nov) covering the period from 1 July to 6 November 2012, its major businesses continued to trade well in most locations during the period under review.

In Hong Kong, Mannings health and beauty operations achieved excellent results, and there was a good performance from Wellcome supermarkets. The businesses in Taiwan continued to improve, and steady progress was made in mainland China.

Restaurant associate, Maxim’s, also delivered a strong performance. The group’s businesses in Malaysia were steady, but the Singapore operations experience increased operating costs. Good progress continued to be made in the Indonesian businesses, although the results were affected on translation due to the weaker local currency, according to the IMS.

(3) Hongkong Land – residential profits higher while rental reversions remain positive despite a subdued office market. According to HKL’s IMS (issued 7 Nov) covering the period from 1 July to 6 November 2012, the Hong Kong office leasing market has remained relatively subdued.

Vacancy in its Central office portfolio at the beginning of November was 3.9%, compared with 3.1% at 30 June 2012. The retail portfolio continued to enjoy full occupancy.

Rental reversions have been generally positive. Redevelopment of The Forum at Exchange Square, which is fully pre-let, is progressing well with completion expected in early 2014. In Singapore, the office portfolio was fully leased with the exception of the third office tower of Marina Bay Financial Centre, which is 76% let following completion earlier this year. In August, the group’s joint venture in Jakarta completed its fourth office tower, which is 88% let.

(4) Jardine Pacific –mixed performance with overall profits slightly weaker y-y. 

(5) Jardine Motors – HK is satisfactory but overall profits materially impacted by China

(6) Strong balance sheet with net debt little changed

A stronger 2013F aside, we also anticipate JM/JS stock trading liquidity to improve upon Vanguard switching from MSCI to FTSE benchmarks for its international stock index funds in early 2013. Both JM and JS are not constituents of MSCI indices, but are part of FTSE indices.