DFI Retail Group

[corporatefatcat]

Let's start a discussion on this Supermarket Giant.
It owns supermarkets, to 7-11s, to Ikeas in Taiwan and Hong Kong.
The return on equity on this company is really high, and although it's dividend yield is very low. I believe there could be a good chance of this steadily increasing in share price over time.
What are your thoughts on it? And it being sold in USD a big factor in affecting its share price.

[shanrui_91]

This is a real Giant, we should not say that SGX does not have huge great company.

Owns 122 Giant hypermart, 781 Guardian stores across Singapore, Malaysia, Indonesia, Brunei, Vietnam
Operates 2071 7-11 stores across Singapore, Hong Kong, China and Macau
Owns 556 Manning store across Hong Kong, Macau, China
Owns 111 Cold Storage/SNS in Singapore, 61 Foodworld Supermarket and 79 Health and Grow in India.
Owns 569 Wellcome Supermarket (1 of 2 largest in Hong Kong) in Taiwan and Hong Kong
Operates 7 IKEA stores in Hong Kong and Taiwan


Owns 50% of Maxim which owns the following:

OPerates 122 Starbucks in Hong Kong and Macau
Owns 123 Fast Food Restaurant
Owns 321 Maxim Cakeshop that nearly operates in most MRT station in Hong Kong and China
Provide catering services for China Aviation Administration of China
Owns Genki Sushi which has 54 restaurants

[yaosheng]

at close to 30x TTM P/E, it seems a bit pricey, even though earnings are growing at 10-15% annually

[shanrui_91]

at close to 30x TTM P/E, it seems a bit pricey, even though earnings are growing at 10-15% annually

it is definitely very expensive now, but its operation is very wide. It has a strong supermarket/hypermarket market share, control of 7-11 in Singapore, hong Kong and CHina as well as being the sole starbuck operator in Hong Kong.

It is also very defensive as consumer staples are simply what you still have to buy even if it is recession. As for convenience store, 50% of their revenue comes from cigarettes

[corporatefatcat]

Might be better getting it through buying Jardine Matheson.
I need to do a Sum-of-the-parts valuation for JMH400.
Has anyone done this so far?
David Winters owns it and it is about 8% of his fund.
http://www.bengrahaminvesting.ca/Resourc...s_2010.mp3
There is the powerpoint slides to the talk where he shows how he values it, however, I can't seem to find it as it is all dead links now.

[shanrui_91]

I have an immediate headache when I look at jardine yesterday night...

Dairy Farm (supermarket, 7-11, Starbuck)
Hong Kong Land (property)
Jardine Cycle & Carriage (Automobile - Mercedes, Toyota, Honda Kia)
Jardine Motor (Aston Martin, Audi, BMW, Jaguar, Mercedes-Benz and Porsche)
Astra (car, financial services, oil palm plantations, heavy equipment and mining, infrastructure and logistics, and information technology)
Mandarin Oriental Hotel Group (42 hotels)
42% in jardine Lyloyd Thompson (insurance)
21% stake in Rothschilds Continuation Holdings(investment bank)
Jardine Pacific (Hong Kong Air Cargo Terminals, Jardine Engineering Corporation (JEC), Jardine Shipping Services, Jardine Aviation Services, Hong Kong Air Cargo Terminals, Jardine Schindler and Gammon Construction)

To be honest, they can form a country of their own and i will be very happy if i am able to value this conglomerate one day

[d.o.g.]

To be honest, they can form a country of their own and i will be very happy if i am able to value this conglomerate one day

Jardine Matheson owns 82% of Jardine Strategic.
Jardine Strategic owns 55% of Jardine Matheson.

This circular/cross-holding structure allows the Keswick family to retain control. Nobody can seize control of either entity separately, it has to be done all at once. It also makes it harder for investors to value either entity. As a result, the stocks have very low liquidity, as the market attitude towards them is either faith-based (just believe in the management and hold forever) or rational (too hard, don't bother).

My $0.02 is that investors are better off looking at the single-purpose listed companies below the 2 holding companies. Jardine C&C is the only tough cookie at this level, as it is a true conglomerate. The others are single-sector operations.

[donmihaihai]

This circular/cross-holding structure allows the Keswick family to retain coAs a result, the stocks have very low liquidity, as the market attitude towards them is either faith-based (just believe in the management and hold forever) or rational (too hard, don't bother).

The kind of stock for investor who is able to value it and willing to do the hard work.

[shanrui_91]

Indeed, this is why stocks like Dairy Farm is so expensive as its business is so easily understood. But Jardine looks very interesting with its track record of 22% compounded annual return over the last 15 years. A really high significant conglomerate and holding company discount must have been given for this company to trade at around P/E of 5. Another problem will be that you have to fork out 20k just to buy 1 lot of it.

[Nick]

Indeed, this is why stocks like Dairy Farm is so expensive as its business is so easily understood. But Jardine looks very interesting with its track record of 22% compounded annual return over the last 15 years. A really high significant conglomerate and holding company discount must have been given for this company to trade at around P/E of 5. Another problem will be that you have to fork out 20k just to buy 1 lot of it.

We do get a PER of 5 for JSH if we use the EPS of US$6.34. But this includes significant fair value gains (which are not recurring) so if we exclude it and use the underlying EPS (given in the financial statement) of US$2.55, you get a pretty decent PER of 15. Please correct me if I am wrong.

http://info.sgx.com/webcoranncatth.nsf/V...5002EACBE/$file/JSH.pdf?openelement [Financial Statement]