Jardine Matheson Stock

Welcome to the Jardine Matheson Half Year Results presentation. I am Suzanne Cheuk, Head of Treasury and Investor Relations. Joining us today are our CEO, Lincoln Pan; and CFO, Graham Baker, who will give an update on our strategic progress and financial performance in the first half of 2026.

The presentation deck is now available on the Jardine corporate website. Just a reminder, all numbers are in U.S. dollars unless otherwise stated. We will address questions at the end of the presentation. You may start inputting your questions by scanning the QR code at the bottom of the screen.

Thank you. I'll now pass it on to Lincoln.

Thank you, Suzanne, and good morning to everyone from here in Singapore. We've had an exciting first half of 2026, highlighted by our first ever Investor Day, our acquisition of I-MED, continued efforts on portfolio simplification, all in the efforts to drive total shareholder returns.

At our Investor Day in June, we provided clarity on our strategic and financial objectives, and we set a clear mission: that Jardine will be an outstanding investor and owner dedicated to building diverse, high-quality scaled businesses in Asia Pacific offering stable and sustainable top quartile shareholder returns. This has been developed in full partnership with our principal shareholders, the Keswicks, and our Board of Directors.

To remind our shareholders in June, we made a number of commitments, which we target to deliver by 2030. First, delivering at least 9% per annum 5-year total shareholder return; second, growing the Jardine Matheson dividend by at least 5% annually which we're well placed to do, at least in 2026, recycling at least $4 billion of capital from the portfolio, excluding additional capital recycling commitments made by Hongkong Land and Astra. And importantly, building at least $200 million earnings from new, high-quality growth pillars through acquisitions such as I-MED. In addition to these commitments, we also announced a new follow-on $500 million share buyback program for Jardine Matheson Holdings.

Now we are already delivering against these objectives. Corporate simplification remains a priority. In January, we completed the privatization of Mandarin Oriental and Jardine Cycle & Carriage has announced simplification actions specifically the distribution in specie of shares in Toyota Motor Corporation, together with a special cash dividend or proceeds from our sale of TMC shares. The distribution in specie would enable JC&C to further simplify the portfolio, allowing us to focus on stewardship of Astra and our Vietnam assets. We are focused to further simplify the JC&C portfolio going forward.

In the first half, Jardine Matheson and its portfolio companies recycled $1.5 billion in capital and reinvested or made commitments to invest $3.2 billion of capital. Excluding Astra and Hongkong Land, we've recycled just under $500 million in the first half of 2026, representing 12% of our 2030 target of $4 billion. We remain active in the second half to push toward realizing at least 20% of this target in 2026 and are planning ahead for more realizations in 2027. We have made further progress exiting noncontrol holdings. We've divested the majority of our holdings in Vinamilk and reduced our holdings in Toyota and Zhongsheng. Investors should expect us to continue to divest and recycle positions in line with our strategic direction, while we will continue to invest via buybacks, bolt-on acquisitions and new pillars of long-term growth.

In May, we announced the acquisition of I-MED. And at the Investor Day in June, we detailed Jardine Engineering and Infrastructure's ambitious growth agenda. And we have made substantial progress restructuring Jardine Matheson as a lean and focused investment company. Jardine's head count has been reduced by around 47% since 2024, while building a high-caliber investment and portfolio support team with Irene Liu and Chris Ganis joining the team in the last several months. Additional senior hires will be announced before year-end.

On I-MED, the $2.4 billion acquisition of I-MED represents a significant step for Jardine in a strategic evolution as a control owner of high-quality businesses in the APAC region with a long history of high-quality earnings growth I-MED will provide an additional source of positive momentum and diversification into the Jardine's portfolio. I-MED's performance for the fiscal year ending June 2026 is in line with our expectations and our transaction underwriting. We are working at this time to put in place an independent Board of Directors and to upgrade the CEO position. With the Jardine Matheson's balance sheet in a strong position, we continue to look for other new control investment opportunities and strengthening our existing platforms via bolt-on acquisitions, namely through I-MED, Jardine Engineering and Infrastructure and Mandarin Oriental.

Where we see value in our existing portfolio, we have and will continue to support share buybacks and share purchases at the Jardine Matheson and the portfolio company levels. They have been substantial over the last 5 years with JMH investing $8.5 billion. In the first half of 2026, Jardine Matheson completed the $250 million share buyback program announced in November, which was immediately followed with a new $500 million share buyback program we announced at our Investor Day in June. At the half year, we also have open buyback programs across Hongkong Land, Astra and United Tractors. And just as a reminder, looking forward to 2030, you should expect our dividend to grow at least 5% per annum, which we will deliver in 2026, buybacks to continue where and when we see value and investments, approximately the same amount as dividends and buybacks combined in a small number of scale, control investments in high-quality businesses to drive earnings growth by and well beyond 2030.

Sustainability remains an important enabler of long-term value across Jardine in our portfolio. Our ESG ratings have continued improvement. For one key rating, we moved from CCC to BBB over the last 5 years. In particular, on decarbonization, we want to approach decarbonization commitments in the same way we manage our financial budgets, meaning commitments to improve year-on-year performance.

I will now hand over to Graham, who will take us through the first half financial performance.

Thanks, Lincoln. Jardine Matheson's portfolio delivered a positive performance in the first half of 2026. Jardine cash flows grew robustly and adjusted underlying net profit was up 9% to $735 million. This figure adjusts for prior year disposals and the impact of the change in Zhongsheng accounting. The proposed interim dividend is 8% higher at $0.65 per share. I'd note here that while we've upgraded our full year dividend guidance, to at least $2.47 per share, consistent with our guidance given at the Investor Day, the dividend growth of at least 5% per annum until 2030. However, you should assume that 8% growth in the interim dividend is also a rebalancing to increase the interim as a share of the full year payout.

We'll look now more closely at underlying earnings. As mentioned, first half underlying net profit adjusted for disposals and the Zhongsheng reclassification increased by 9% to $735 million. The key components of this, as shown on the slide, were higher shareholdings in JC&C, MO and Hongkong Land, which drove 2% growth, 10% organic growth at constant FX across the portfolio. Within that, 4% reflected one-off lease remeasurement gains in Jardine Pacific's Motor business and a larger-than-normal FX headwind, principally from depreciation of the Indonesian rupiah. Overall, 5% underlying growth, excluding the effect of disposals, reclassifications and a nonrecurring lease gain is an encouraging performance and with ongoing economic challenges in our largest market.

Looking in more detail at underlying net profit by business, Astra remained our largest contributor despite the challenges which were primarily felt as a slowdown in the Mining Solutions segment. Astra's Automotive, Consumer Finance businesses in Indonesia remained resilient, growing in the first half. Hongkong Land, Jardine Pacific and DFI also grew strongly once again demonstrating the value of our diversified portfolio. Corporate costs were lower as net financing costs in the prior year reversed to net financing income as proceeds from capital recycling moved the parent balance sheet to a net cash position at the beginning of the year.

I'll cover the core portfolio companies in more detail in a moment. Outside underlying earnings, the group recorded a net nontrading loss of $196 million, 17% smaller than the loss recorded in the prior year. Following the change of accounting for Zhongsheng, the investment is now marked-to-market and Zhongsheng share price weakness was the largest contributor to the fair value loss recorded on other investments. Our interest in Zhongsheng dropped from 21% to 14% in the first half. Following Hongkong Land, we also recorded our share of the profits from build-to-sell through nontrading as they steadily wind down the business over a number of years. As usual, Hongkong Land also drove the largest part of the fair value adjustment on investment properties. We recorded an increase in the first half of 2026 as the Central market in Hong Kong continued its recovery bringing higher open market rents for office and marginally lower cap rates in the retail portfolio as the Tomorrow's CENTRAL renovations progress and luxury retail demand grew.

On the group's balance sheet, net borrowings, excluding Astra's financial services companies, increased by $906 million, although gearing remained very modest at 7%. The increase was principally driven by payment of Mandarin Oriental special dividend following the completion of the sale of One Causeway Bay and at Astra, which completed acquisition of the ASA Gold Mine, and progress buyback programs at parent level and United Tractors. JC&C reduced its net debt using proceeds from the sale of shares in Vinamilk and half of its position in Toyota Motor Corp. And JM Parent further built its net cash position despite completing the privatization of Mandarin Oriental in the first half.

Group cash flows from operating activities for the period were down $600 million primarily due to more challenging conditions in Astra's Mining Solutions business. Cash flows from investing activities recorded a net outflow of $392 million compared to an inflow of $416 million in the prior year. This principally reflected higher outflows for other capital expenditure which rose to $1.7 billion, as in addition to ongoing organic CapEx, Hongkong Land completed its investment in Suntec REIT, and Astra, its gold mine investment. The sale of associates and JVs mainly comprised the transfer of MBFC and One Raffles Quay to Hongkong Land's private REIT in Singapore. The sale of investment properties included a handover of 4 floors of One Exchange Square to the Hong Kong Stock Exchange and other disposals mainly reflected JC&C's sales of shares in Vinamilk and TMC and our own sale of shares in Zhongsheng. Cash outflows from financing activities were broadly in line with the prior year. The group has $12.7 billion in liquidity headroom to finance future growth. Overall, the group's portfolio companies continue to be highly cash generative, supported by strong balance sheets and access to considerable liquidity.

Now turning to Jardine Matheson's corporate balance sheet and cash flows at the parent company level. Parent free cash flow rose strongly by 21% to $709 million in the first half, primarily reflecting strong performance by the portfolio companies in 2025 and newly enhanced recurring payout policies from some of them. Cash cover for the Jardine Matheson dividend remained very comfortable at 1.9x. The parent company's net cash position of $379 million at period end, comprised 10- and 15-year bonds totaling $1.2 billion issued in 2021 at an effective interest rate of 2.6% and $1.6 billion of corporate cash held at leading high-quality regional and global banks. We have, of course, committed to the acquisition of I-MED, which we expect to complete in the second half and are progressing our new follow-on $500 million buyback program.

However, with further capital recycling ongoing, including JM's share of the special dividend announced yesterday by JC&C, we expect the corporate balance sheet to remain in a strong position at year-end. And with further substantial committed facilities, the group has ample flexibility for new capital deployments should they arise.

I'll now go through the performance of our core portfolio companies for details do refer directly to our company's respective results briefings. Looking first at Astra. Unless otherwise stated, the numbers on this slide are shown in local currency. And like all the other portfolio company slides, are on a 100% basis. Net profit in local currency was 14.9 trillion rupiah, a 7% decline compared to the first half of 2025. This was primarily driven by a lower contribution from the Mining Solutions segment as some customers' coal quotas were restricted and the Martabe Gold Mine was out of production. Importantly though, an evidence of the resilience of the Indonesian economy, earnings were up in the automotive, financial services and other segments. Astra's contribution to Jardine's underlying net profit, excluding nontrading items, fell by 8%.

The effects of the weak rupiah were partly offset by an increase in Jardine's effective shareholding. Astra's 5-year TSR was at 6.6% per annum despite challenging macroeconomic and investor sentiment. As Lincoln mentioned, Astra and United Tractors both have active share buyback programs aligned to their new shareholder return led strategy. The operating environment in Indonesia may remain uncertain in the short term, although we are encouraged that the Martabe Gold Mine has returned to operation. However, we remain confident in Indonesia and Astra's long-term fundamentals and are committed to both.

Hongkong Land continues to see strong 5-year TSR as it makes meaningful progress against its Vision 2035 strategy. Capital recycled by Hongkong Land rose a further $100 million to $3.7 billion, 93% of their announced target for delivery by 2027. Net debt has fallen a further 5% to $3.4 billion, providing capacity to fund future investments and growth. Underlying net profit was 11% higher at $259 million, benefiting from lower net financing costs. Underlying earnings per share rose 14% as their buybacks progress. The interim dividend, which Jardines will receive increased by 33% to $94 million, reflecting a rebalancing of Hongkong Land's annual dividend payout towards the interim as well as upgraded earnings guidance for the year.

Total equity increased by 2% to $31.4 billion, reflecting progress at West Bund and the upward valuation adjustments already mentioned in Central. DFI's contribution to Jardine's underlying net profit in the first half increased by 49% to $90 million, excluding the impact of disposals. Execution of its customer-first strategy saw positive sales and profit momentum across all banners in its key markets, which, together with lower financing costs drove continued strong growth. DFI have also revised their full year earnings guidance upwards to between $285 million and $305 million. 2025's strong growth as well as an increased dividend payout ratio saw Jardine's share of the interim dividend increased by 77% to $65 million. DFI finished the half year with minimal net debt, providing capacity to fund strategic priorities ahead. Mandarin Oriental reported lower underlying net profits due to a lower contribution from owned hotels with disposals in Miami and Munich impacting as well as closure of the Hong Kong property for renovation.

The management business remains stable despite the impact of conflict in the Middle East. Expanding the management business, of course, remains the focus for future growth and another 5 new management contracts were announced in the first half 2026. As noted earlier, Mandarin paid a special dividend of $668 million to Jardine in January following the disposal of the top floors of One Causeway Bay. Part of this was used to fund the privatization. Jardine Pacific reported higher underlying net profit of $102 million, up $35 million or 51%. Of that, $24 million was attributable to lease remeasurement gains reported as part of others, which will not recur in the second half. The remainder came from recovery in the consumer businesses. Jardine Engineering and Infrastructure was marginally down in the first half of the year but is trading in line with expectations and typically sees the larger part of annual profits delivered in the second half of the year.

As shared at the Investor Day in June, JEI has a target to double earnings by 2030. JC&C's contribution to underlying net profit, that is excluding the impact of the Vinamilk disposal, remained flat at $45 million. Improved contributions came from the Vietnam businesses and lower financing costs. Foreign exchange gains recognized in the prior year did not recur as the underlying loans were either repaid or redenominated in Singapore dollars. JC&C made further progress on portfolio action initiatives, specifically the sale of shares in their listed investments in Vinamilk and half their holding in Toyota. Following the TMC divestment, JC&C has proposed a special dividend of approximately $0.73 per share, comprising a cash distribution funded from the proceeds of the part sale and a distribution in specie of the remaining TMC shares. The distribution in specie enables shareholders to choose between holding Toyota shares directly or realizing the value in cash. Overall, corporate costs at Jardine's parent more than halved in the first half due to net financing income generated following the significant recent capital recycling activity.

While within this overall reduction, net overheads grew, this was predominantly as a result of lower management fees charged to the portfolio companies. As the benefits of head office restructuring come through in the second half, we expect to see significant cost reductions net of building our new investment team and therefore, expect overheads for the full year to be broadly in line with 2025. Finally, looking ahead to the full year, our guidance given in March recognized that Jardine's 2026 underlying earnings will exclude a number of items that contributed meaningfully in 2025. Specifically, businesses disposed by DFI, primarily Singapore Food and Robinsons Retail, Vinamilk shares disposed by JC&C. And finally, the equity share of earnings from Zhongsheng, which, with our reclassification of Zhongsheng to be an investment rather than associates are no longer reported. After adjusting for these changes, our pro forma 2025 underlying EPS base for 2026 estimates was $5.33.

We've seen encouraging first half results, even putting aside the nonrecurring lease gain in Jardine Pacific. These have led to guidance upgrades at DFI and Hongkong land. However, uncertainty remains over the short-term trajectory for earnings in Indonesia, our largest contributor. Accordingly, we believe it's prudent for now to hold our earnings guidance unchanged. For 2026, underlying earnings to be broadly in line with 2025 adjusted for business disposals. We will, of course, provide a further update once we've seen results in the third quarter with the IMS release in November. As outlined at the Investor Day, though, we can say already that Jardine's full year dividend will rise at least 5% to $2.47 per share.

With that, I'll hand back to Lincoln. Thank you, Lincoln.

Thank you, Graham. To conclude, Jardine is already delivering against the strategic goals we set out at our Investor Day. Underlying earnings and parent free cash flow remain robust, and our strong execution of recycling initiatives across the portfolio positions Jardine well for further investment activity in the next 18 months. Our full year underlying net profit outlook remains unchanged at $5.33 despite turbulent conditions in our largest markets. We'll continue assessing the outlook over the course of Q3.

And the resilient returns and cash generating capacity of our portfolio as well as the comfortable cash cover give us confidence to declare an interim Jardine Matheson dividend of $0.65 per share, up 8% and a full year dividend of at least $2.47, up 5%. Our focus as we enter the second half is to continue driving total shareholder returns improving cash flow across our portfolio, portfolio simplification, improving Astra performance and, importantly, integrating I-MED into our portfolio. While I'm pleased with the progress we've made in the first half of 2026, there remains much to do. Jardine must continue to evolve, build investment capability, upgrade talent, actively improve our portfolio and manage risk and return our portfolio.

We will now take questions, and over to you, Suzanne.

Thank you, Lincoln. [Operator Instructions] The first question came from Jayden Vantarakis of Macquarie. He has 2 questions. The first is the cash buildup was positive in the first half of '26 and factoring in the I-MED purchase during the second half, does management have a view on where net cash or net debt would end up by the end of the year? The second question on Mandarin Oriental, following the privatization, the profit contribution declined. Is it purely a timing issue due to renovations or were there other underlying trends to call out?

Yes. Sure. I'll take the first one. So look, Jayden, obviously, we're in pretty good position for funding I-MED. That's very clear. But beyond that, obviously, the net cash position depends on, as I've mentioned, ongoing activities in terms of recycling as well as the fact that we have an ongoing net surplus from income in over the dividends that we pay out in cash. So there's still a reasonably wide range of outcomes for the balance sheet position at the parent by the end of the year.

At the top end of that, we could be pretty much neutral. At the lower end, we could be a few hundred million dollars in net debt. We'll obviously see how those discussions progress. They have to deliver value, and they have to make sense, but something in that ballpark is probably the right range to think about.

And then your question on Mandarin, I think there are 2 primary factors to the lower performance in terms of profit. First is the renovation of our property in Hong Kong, which is a quite significant portion of underlying earnings. The second is not unexpectedly, some slowdown in our properties in the Middle East due to the conflict in the region.

Next question came from John Lam of UBS. There are 2 questions. How is the search of the I-MED new CEO? Second question, you mentioned significant progress of capital recycling in the second half of '26, 20% of the $4 billion commitment. How should we look at that?

Okay. So in terms of I-MED CEO, I think we have developed a very strong network of partners and relationships in the health care sector in Australia. And I think what we want to do is do a systematic search and look at a wide range of potential options for the business. We've appointed a consultant to help us with this. We're in the process of interviewing and discussing with the senior doctors within I-MED, management with I-MED on what the shape of a new CEO of the business will look like. And I do think by the end of the year, we'll be ready in a position to announce a new CEO.

In terms of capital recycling, we have a number of initiatives going on across the portfolio. I think there's some low-yielding noncore real estate assets, both commercial and residential, we continue to work on. There's a number of other businesses, which we don't think will fit our long-term portfolio, which we're in the process of trying to explore exits on. And ultimately, we're also looking to further divest some of our public market positions. Ultimately, 2026 is a time period, and we'll deliver everything we can. But ultimately, our goal is to deliver this $4 billion of recycling across the non-Hongkong Land and non-Astra portfolio as quickly as possible.

Next question came from Karl Chan of JPMorgan. Karl has 3 questions. The first one on earnings guidance. The first half '26 earnings were up 9%, but full year earnings guidance is still just flat. Is this a conservative guidance? Second question on Indonesia. At the Investor Day, we said that we aim to diversify exposure. So however, JM has been increasing stake in JC&C. How should we interpret this? And with the recent geopolitical outlook, there could be more challenges in the Indonesian economy. Does JM has a plan B? The third question on macro. Some of the Hong Kong-based conglomerates takes a very cautious sense towards the global economy and that their priority is to recruit as much cash as possible. What's JM on the global macro?

Sure. I'll take that one. Look, guidance is guidance. We don't say whether it's conservative or whether it's reckless. We give you the guidance that we think is appropriate at this point in time. Clearly, it does reflect a degree of caution that would be reflected in a slowdown. But obviously, one of the reasons for pulling out the impact of the nonrecurring gain, which accounts for 4% of the 9% growth is to understand that things can pop up positively or negatively. As we said, we'll give further guidance when we get through the third quarter.

Okay. In terms of -- first off, the question around Indonesia, we have several things happening in Indonesian market. I mean, first off, there's a shock in the capital markets due to MSCI reviews and broader overall concerns about the macro economy. If you go back to the fundamentals around Astra. Astra's automotive business, Astra's financing business had an outstanding first half of the year. So as we step back as a long-term investor, we are focused on driving cash-on-cash return out of our Astra portfolio. And we continue to see value in that portfolio. We continue to do a lot of value creation work together with the Astra management. We have active buybacks going on within Astra and United Tractors.

So despite macro global concerns around the Indonesian capital markets, the fundamentals of the Astra business continue to be ones that we're excited about. You should look at our occasional efforts to buy JC&C shares is -- it is TSR-driven. It is return-driven. And when it hits a certain level, we may and we may continue to build our stakes in JC&C ultimately because we see value as a way to drive earnings and a way to drive returns in our portfolio. In terms of broader macro, I think as we've talked about many times in prior sessions in our Strategy Day, we like Indonesia is a very significant part of our portfolio. Diversification is a good way. And I think the right way to balance off risk and somewhat volatile global macro conditions, and we will continue to do that.

Part of our capital recycling efforts here reflects the desire to build a cash war chest and decrease risk in our portfolio and to strengthen our balance sheet. It doesn't mean as we do capital recycling initiatives, that capital is going to go out the door right away. I continue to look at the next 12 to 24 months as a period where Jardine needs to be careful and opportunistic and how it deploys capital. We're not going to deploy capital for diversification's sake. We're only going to put capital to work if we believe in the long-term growth of the sector, there's good quality return on capital for us and it meets our TSR objectives.

Next question came from Karl Choi of Bank of America. This question was also on earnings guidance, which we covered. Second question, why do redistribution of Toyota shares instead of outright sale of the shares? The second question, can you share more color on the qualities you were seeking for the new CEO of I-MED? Was the departure of the former CEO planned?

Okay. In terms of the distribution in shares of Toyota, first off, this was Toyota is an extremely important long-term partner of Astra and Jardine Matheson. We like our strategic equity ownership with Toyota and our recent sale of shares in Toyota and this distribution of shares was done in consultation together with TMC. So hopefully, that addresses your question. We want to have a holding in TMC. We like moving that holding to the top of the holding company and having that at the Jardine Matheson directly related to direct relationship with Toyota.

In terms of your question around the I-MED's CEO, it was not planned. But ultimately, we made the decision to move the CEO on given some actions and some things we've found out. But ultimately, we think we can find and identify a material upgrade in the CEO. Important for us is that this transaction is a partnership between Jardines, the management of I-MED and the medical community within I-MED. And an important qualification we want in the CEO of this business is somebody who can build confidence and long-term relationships with the medical practicing community of the I-MED partnership. This needs to be harmonious and needs to work. And we think a new CEO coming in will significantly upgrade the culture and the way we work with doctors.

Next question came from George Choi of Citi. First question is on Hongkong Land. Within your investment property portfolio in Chinese Mainland is West Bund Central the only untouchable. If any of the properties in China does not meet the return requirements that Hongkong Land is looking for, will they be disposed of? Second question on JC&C. Does the name change hint that more capital recycling will be done there? What do you see the role of JC&C evolving over the next 5 years within the group?

Okay. First, I think in terms of questions on Hongkong Land, and disposal strategies and property strategies, I think it's best to continue to have those conversations principally with Mike Smith and Craig Beattie. That said, in terms of how you phrase your question, there's nothing in your question that I don't disagree that I disagree with. That is exactly how we look at all properties. West Bund is still in development and our equity ownership, what we do with it is -- it's too early to have any conversations around that, but it is a development we continue to put capital and want to build.

But ultimately, Hongkong Land capital decisions, Mike and Craig are the right people to talk to. In terms of the name change for JC&C, again, we want to reflect what this business is, is an intermediate holding company. Its principal purpose is to manage and cultivate our Astra and Vietnam key investment holdings there. It is going to be extremely unlikely that we will use JC&C to do new investments and new capital deployment. So in a sense, is it a holding vehicle. It is a vehicle which we plan to recycle more assets. There are noncore assets in our portfolio, which we will look to divest. And over time, we will look at different avenues to continue to simplify our holding in this part of our entire holding structure. But JC&C, intermediate holding company. It will not have its own independent total shareholder return target. It's not going to be very unlikely we do anything new within JC&C.

Next question came from Jeff Kang of CLSA. First question on impairment. Just to confirm, was there any impairment charge recognized at UT or Astra with respect to Martabe Gold Mine? Second question on DIF (sic) [ DFI ]. Is there any implication on how JC&C or JM thinks about other listed equity investments going forward?

Sure. There was no impairment on the Martabe.

Okay. The second question is, I think a distribution in share is a tool that we have available to us. And for the right assets, we will use distribution in shares. I think this is ultimately the first time we, as a group, have done this, and we're trying to do it in a fair way for all shareholders, but I think it's important for all shareholders to know that this is a tool available to us. And for the right assets within our portfolio anywhere is something I will consider.

Next question come from Simon Cheung of Goldman Sachs. Two questions. How do you feel about earnings outlook for Astra and growth driver going into second half of 2026? Second question, Zhongsheng reduced in the first half of '26. Should we be expecting further divestment? And if so, what's the time line?

Sure. I mean, I can have a go at both of them. I mean, the earnings outlook for the second half at Astra. I'd probably refer you to Lincoln's answer to the question on Hongkong Land, obviously, the right team to talk to directly about that is the Astra team. But we have reflected it in our own guidance. The uncertainty there is part of our prudent approach at this point in the year.

On Zhongsheng, look, it's a noncore holding for us. And so in line with our strategy to not focus on noncontrolled positions for the long term, then you should not expect us to be in there for the long term, exactly the timing of when and how that will progress remains to be seen, but you should expect it to probably only move in one direction.

Next question came from Elizabelle Pang of DBS. She has 3 questions. First question on the name change. It was a bit surprising in terms of the announcement that came up to the Investor Day. So why the timing? What has changed? Second question, Astra is set to have this October Investor Day, what can we expect and what will be the key items that JM team thinks is critical for Astra to execute on? First question on integration of I-MED. When do you expect earnings to start being accretive to JM?

Okay. First off, on the JC&C name change, the reason, again, this is coming at this time is we do need to take this to a shareholder approval and it's all being done as part of the normal corporate governance cycle, the approval of the special dividend and approval of the name change. We're decided together in consultation with the Board to bring to shareholders an AGM at the same time. Again, this is just again, it's been done in consultation with the Board and this was the appropriate time to do this together.

In terms of the Astra Investor Day, my personal view is, what do I want to see from the Astra Investor Day? I would like to see a clearer articulation of the strategy around the 3 core pillars of Astra. What are we going to do in auto? What is our growth in financing? What is our strategy around our United Tractors business? That needs to be the focus in the core of the Investor Day. I think often many questions that Rudy and Amy get about what they're going to do in recycling, give us a long-term plan, what are you going to sell? As Graham often says, it's a very awkward thing to talk about what children you don't like. I think what we should expect to see by the time the Astra Investor Day has come is actual recycling initiatives they have taken to simplify their portfolio as well.

So I think they've come out and talked about their buyback program, but they should continue to talk about operating strategies for their respective key verticals, where they have progressed in capital recycling, but also where they're advancing the team and culture and the deeper bench of management and talent within Astra. I think that should be the key areas that we would like to see come out of the Investor Day. In terms of I-MED, I think we've been upfront in terms of when we announced the deal that we did not think it will be accretive to earnings until after 12 months. That continues to be where we see I-MED earnings to be.

And so again, to be clear on that, I-MED, we think itself will contribute to earnings next year, but net of the cost of financing the equity, we expect it to be neutral in the first 12 months.

Two follow-on questions from John Lam of UBS. The first one is on NAV. Looking into the next 5 years, Jardine Matheson's NAV composition is likely to shift more from unlisted NAV -- from listed to unlisted NAV due to the path of building $200 million [indiscernible]. So how do you think about that? Will that create a complication in estimating your NAV? And that's perhaps do you want to have more regular disclosure on the unlisted business? Second question, will you consider listing Hongkong Land or DFI in Hong Kong?

Sure. I'll take the first one. Look, I mean we fortunately now have a thriving community of analysts who are well equipped and do publish NAV on both the private and publicly listed estimates. And of course, there's a range of approaches on those, some take the market value for the listed entities. Some take their own price estimates. And we're grateful for that coverage, but our business is, we believe, working with the portfolio of companies to ensure that they operate well, managing capital effectively rather than putting out our views of what the valuation of the share should be. So we would encourage everybody to do that.

We believe we've been a lot more transparent over the last 4 or 5 years in terms of the performance of the businesses, and we will continue to be very open in dialogue with our coverage community and of course, with our investors around the performance of private assets. They'll be every bit as transparent in our results as, of course, the public companies are. But as to us publishing NAVs, I think that's unlikely in the near term.

In terms of your second question, I think it is clearly the case now that Hong Kong is the most attractive and most liquid exchange within Asia, right? That is a fact. The second thing we do believe, however, is relisting a business purely for the perception of potential arbitrage is a short-term value-creating exercise and not necessarily going to be a long-term value creation exercise.

So looking and exploring at putting any of our businesses on the Hong Kong Exchange, there is nothing that prevents us from doing so. But as a long-term shareholder of the business, we are not in an exercise of redomiciling just for a short-term pop or sugar hit on a stock. It needs to be the right stock exchange and the right stable exchange for our investors for the long term. But we are looking at all options around our businesses. There are no there's no blocker for us to look at listing any business in the Hong Kong Exchange. Liquidity right now is extremely attractive. The key for us is it needs to be the right decision for the long term.

And of course, there are dual listing option, of course, as well.

We are calling for any final questions that you may have. [Operator Instructions] If not, we will close the Q&A session. Thank you very much for attending today's session, and we look forward to seeing you in our next results presentation.

Good morning, everyone. I'm Suzanne Cheuk, Head of Treasury and Investor Relations at Jardine Matheson. Welcome to the Jardine Matheson Holdings Full Year 2025 Results Presentation. For those joining us in the room here, you can download the presentation slides from our JM corporate website or at the QR code here. For those joining us online, you should now be able to see the live webcast and presentation slides. [Operator Instructions]

Now I would first like to introduce our speakers today. We have Lincoln Pan, Chief Executive Officer of Jardine Matheson Holdings; and Graham Baker, our Chief Financial Officer. As I'm sure many of you already know, Lincoln joined us on the 1st of December 2025. Please join us in welcoming him for his first results presentation.

Today, you will hear from him on his vision for Jardines, our commitment to shareholders and how we'll deliver, which we will go into greater detail on the 16th of June during our Investor Day in Hong Kong. Graham will then take you through the financial performance of the company and the portfolio. There will be a Q&A session at the end of the presentation, which I'm sure all of you are very much looking forward to. But for people in the room, I would kindly ask that you hold your questions until then.

With that, let me now ask Lincoln to begin our presentation.

Okay. Well, thank you, Suzanne, and good morning to everyone here in Hong Kong and to those who have joined us online. I'm looking forward to an engaging session with all of you today. So thank you again to the many partners of Jardine Matheson, including some of you in this room, who have welcomed me to this great organization.

At Jardine Matheson, we have set a clear ambition for ourselves: We strive to be an outstanding investment vehicle focused on building diverse high-quality businesses in Asia Pacific delivering sustainable, top quartile total shareholder returns. Two years ago, our Executive Chairman, Ben Keswick, initiated a transformation process to evolve Jardine Matheson from owner-operator to an investment company.

Good progress have been made, strengthening our portfolio leadership teams and boards of industry leaders, setting total shareholder return as our governing KPI and aligning shareholder and management incentives and recycling capital. Today, our job is to accelerate the evolution of Jardine Matheson and our role as an investment holding company, building an organization that's committed to active long-term value creation, talent development with aligned incentives, world-class governance and continuous improvement in sustainability.

And whilst we'll lay out more of our strategy and financial objectives in greater detail in our Investor Day in the summer, today, I would like to begin outlining the principles which Jardine Matheson will operate with to deliver for our shareholders. First and most importantly, we're targeting sustainable top quartile 5-year TSR outperforming alternatives for investing in Asia. This will be supported by a commitment to growing the dividend annually and value creation initiatives to drive portfolio performance. Our goal is to be a stable, diversified platform, delivering GDP plus growth and growing cash-on-cash distributions across our markets.

Secondly, we'll have an active program to recycle capital, exiting below hurdle assets with limited prospects and recycling capital toward businesses existing and new that improve our quality of earnings. Both our portfolio investments in Hongkong Land and DFI Retail have done an excellent job of this in 2025. In 2025, Jardine Matheson and its portfolio companies recycled $4.8 billion of capital more than the last 4 years combined.

Thirdly, we'll principally be a control or lead investor in our portfolio companies. This is a change to our legacy historic strategy. Being a Jardine Matheson company must come with meaning and must come with principles. These include our ability to appoint, incentivize, develop and change management, operating with international standards of governance and a commitment to environmental objectives. From my experience in Asia, this is best done and almost only done as a control investor.

And finally, we'll be a lean holding company where practically every resource at Jardine Matheson must be focused on enhancing value and managing risk in our portfolio and thoughtful capital recycling. This is also a meaningful change from our legacy strategy.

2025 was a strong year for Jardine Matheson and its portfolio companies. Alongside the significant capital recycling below hurdle rate return investments at Hongkong Land, DFI Retail, Mandarin Oriental and Jardine Cycle & Carriage, there was a $1.4 billion deleveraging of the JMH parent company balance sheet. The JMH parent company balance sheet finished the year in a net cash position, which provides us with flexibility for future investment opportunities. 5-year TSR at the year-end was 8.8%, up markedly from negative 0.6% a year earlier.

We continue to see significant value in our existing portfolio as well. And as a result, we launched a $250 million buyback program for the Jardine Matheson Holdings level in November. We are also investing. There is a misperception that right now, that Jardines is a seller of everything. This is categorically not true. We invested $2.8 billion back into our companies in 2025, and we'll continue to reinvest in parts of our portfolio we believe in.

Graham will go over the financials in a moment, but I would like to highlight our dividend per share has increased to $2.35, reflecting a progressive dividend policy, which has delivered annualized growth of 6.4% over the last 5 years.

Whilst we made progress in 2025, we still see significant upside for JMH. Our portfolio companies are tightly focused on improving execution, and we are continuing to support this with accountability, the introduction of TSR-linked long-term incentive plans across our businesses and investment in talent for new investments and portfolio value creation. You will see us continue to be more ambitious and active in assessing and recycling capital in our portfolio.

We have clear return hurdles for new capital deployment, and we will see opportunities to continue to simplify the group and improve shareholder value as we have done with Mandarin Oriental. We'll share more on our specific capital allocation hurdles and targets and principles later on in June, and we'll begin to work to grow Jardine Matheson's earnings in the future, focused on scalable businesses delivering and diversifying our Asia footprint. These activities are supported by a macro environment in Asia that has been generally improving and which favors permanent capital that can look beyond near-term volatility. I hope you can start to see that Jardine Matheson is a very different company today than in the past.

I'll now turn to some of the year's highlights, starting with the privatization of Mandarin Oriental in January. This privatization enabled us to eliminate an inefficient listing structure whilst releasing significant capital for shareholders by selling part of One Causeway Bay, a noncore real estate asset. The privatization will allow our outstanding management team, led by Laurent Kleitman to execute their ambitious growth agenda in a private setting. Importantly, it will also create options for Jardine Matheson to realize greater value from our Mandarin Oriental ownership in the future. The hotel management business is a really exciting business for us and expect to remain a growth driver for the group.

Astra delivered robust earnings amid softer domestic conditions and a challenging capital market environment. Despite this, share price growth in the year supported 5-year TSR of 9.8%. Aligned with our TSR strategy, Astra and United Tractors each completed a IDR 2 trillion, or USD 121 million share buyback program in January. They announced a subsequent tranche of share buybacks amounting to IDR 1 trillion each in the same month, which we're now in the process of completing. We expect these buyback programs to continue given the strong value we see in Astra.

We are also working with Astra on talent management and incentive alignment as we have done across our other parts of our portfolio. In the first half of 2026, we'll also announce enhancements to Astra's Board of Commissioners. Alongside this, executive succession efforts are ongoing. You'll hear more leadership announcements from Astra in the coming months.

Looking forward, Astra will continue to focus on its core automotive, consumer finance and heavy equipment and mining segments while investing in growth segments, for example, like healthcare and infrastructure. We remain committed to investing more in Indonesia and to supporting Astra's capital recycling efforts to drive future growth. I'm personally spending significant time in partnering with the Astra management team and down in Jakarta practically every month with our Astra leadership.

2025 was a productive year also for Hongkong Land as they took meaningful steps forward in delivering the early phases of their strategic Vision 2035, which would transform the business into a more disciplined, capital-efficient and growth-oriented company. The early phases of this transformation focus on capital recycling. Completed or announced net proceeds recycled at the end of February have totaled $3.6 billion since the strategy was announced in October 2024.

A major milestone announced in February 2026 was the establishment of the Singapore Central Private Real Estate Fund, Hongkong Land's first private real estate fund. The new fund has $6.4 billion of assets under management with Qatar Investment Authority and APG Asset Management as founding investors. The fund represents a significant milestone in the execution of Hongkong Land's strategy, to build a scalable third-party capital platform, broadening Hongkong Land's investor base and diversifying income through fee-based revenue. This is a good example of Jardine Matheson supporting our portfolio companies in enhancing quality of earnings and a portfolio company leadership executing new strategies at pace. Michael Smith and his team are bringing significant innovation and drive to this business.

DFI Retail also made excellent strategic progress during the year. This was led by decisive portfolio actions, including divestment of low-yielding minority stakes in Yonghui, Robinsons Retail and our Singapore Food business. The proceeds from these divestments allowed DFI to pay a $600 million special dividend with Jardine Matheson receiving $465 million. DFI have committed to a 70% dividend payout ratio and have announced a midterm target of $310 million to $350 million underlying profit by 2028. Scott Price and his team have brought execution and focus to DFI. They are laser-focused on executing DFI's strategy and an outstanding team of retailers.

Whilst we see value in our existing portfolio, we have and will continue to support share buybacks and share purchases at the JMH and the portfolio company level. These have been substantial over the last 5 years with JMH investing $7.7 billion. At the year-end, we had open buyback programs across JMH, Hongkong Land, Astra and United Tractors. As the company has announced, I am also an ongoing investor in Jardine Matheson, having personally invested about USD 10 million before and after I've started as CEO. This is a commitment I made to my principal shareholders that a CEO must have personal alignment, independent of stock-based compensation. My intention will be to reinvest the majority of my short-term incentive compensation back into Jardine Matheson stock while I remain CEO of Jardine Matheson Holdings.

Sustainability continues to be an important enabler of long-term value creation across Jardines and our portfolio. In 2025, we continue to make progress on carbon reduction, aligned with targets we are setting with our portfolio companies. At the portfolio company level, we're seeing tangible improvements in execution with businesses advancing emissions reduction initiatives while also strengthening operational resilience and cost efficiency. We're also seeing improvements across external ESG ratings, which we view as an important validation of our approach as long-term owners and responsible stewards of capital.

And now let me pass the presentation to Graham, who will take us through the financials in more details.

Thanks, Lincoln. Jardine Matheson delivered very solid performance in 2025. Our improved execution and heightened focus on shareholder returns at a time when investors have recognized again opportunities in Asia to diversify their holdings resulted in a strong recovery of our 5-year TSR to 8.8% per annum, the highest level in over a decade.

Underlying earnings per share improved by 9% to $5.72, supporting a full year dividend of $2.35 a share. You'll recall that in the prior year, we held our dividend despite a drop in underlying earnings. Reported earnings returned to net profit of $1.1 billion, rising by nearly $1.6 billion from the prior year loss. This substantial turnaround primarily reflects the fair value of investment properties, which rose in 2025 in Central after 6 years of revaluation losses. Parent cash flows were robust. And importantly, our parent balance sheet finished the year in a net cash position, providing investment flexibility.

Starting with earnings. As shown on the left-hand chart, underlying net profit grew 11% in the year to nearly $1.7 billion. From 2025 onwards, we have updated our definition of underlying earnings to exclude entirely the results of Hongkong Land's build-to-sell or BTS business. 2024 underlying net profit is therefore also re-presented in the chart. This change reflects Hongkong Land's announced exit from BTS and therefore, I believe, will help better understanding of the progress of our ongoing strategic businesses.

As this is a change, however, we've also included the chart on the right, which shows underlying net profit under the prior definition. Three things to note here. Firstly, net profit in 2025 is the same on both definitions as net all-in profit from build-to-sell was less than $1 million in 2025. Secondly, that was not the case in 2024 when BTS at our level registered a net loss of $47 million. So if we'd stayed on the old definition, our headline underlying growth rate would actually have been 3% higher, at 14%, than the 11% we've announced today. And thirdly, our result in 2025 on the old definition was 2.6% above the guidance we gave for the year, which you'll recall was for flat earnings, excluding the 2024 BTS impairments.

So in summary, a very solid earnings performance in 2025, both in growing our ongoing businesses and against guidance.

Looking at this now by business. Our 2 largest businesses, Astra and Hongkong Land, both saw marginally lower contributions in 2025. However, this was more than compensated by growing contributions from DFI, JP and JC&C, once again demonstrating the value of our diversified portfolio. I'll cover the core portfolio companies in more detail in a moment. However, for now, JC&C saw an improved contribution from Vietnam and also benefited significantly from foreign exchange gains and lower financing costs at the corporate level.

Our outside-in estimate of Zhongsheng's contribution is 23% below the prior year, linked to the bottom end of the range of analysts' estimates, following a disappointing result in the first half of the year and ongoing pressures on margins from oversupply in the mainland new car market. Finally, we benefited in 2025 from a significantly lower set of corporate charges, $67 million below the prior year due to higher investment income, lower financing costs and lower corporate overheads.

Outside underlying earnings, the group recorded a net nontrading loss of $572 million, well below the nearly $2 billion charge in 2024. As mentioned before, the main change was in the valuation of Hongkong Land Central portfolio, which rose in 2025, the first increase since 2018, principally driven by the retail portfolio. Within impairments, the major item was against the carrying value of Zhongsheng, reflecting its deteriorating share price and challenging market outlook.

On the group's balance sheet, net borrowings, excluding Astra's financial services companies, fell by $4.6 billion to $2.7 billion, and gearing fell from 14% to 5%. This was driven by debt reductions at almost all portfolio companies and at the JM parent company level. Financial services net debt moved marginally upwards in line with growth of the business' lending portfolio.

Group cash flows from operating activities for the year were $5.3 billion, up 6% with stronger cash generation at DFI, Astra and Jardine Pacific. Investing activities generated a net inflow of $2.1 billion compared to an outflow in the prior year. Organic capital expenditure in our subsidiaries, together with investments in joint ventures, in total grew 17% to $2.8 billion. However, while we continue to grow our organic business investments, we also saw $4.8 billion of capital recycling from, among other things, the sales of Yonghui, Robinsons Retail and Singapore Food by DFI; 9 floors of One Exchange Square, MCL Land and MBFC Tower 3 in Singapore by Hongkong Land; the top 13 floors of One Causeway Bay by Mandarin Oriental; part of its Vinamilk stake by JC&C; and other listed investments sold by JMH Parent.

Lower cash outflows from financing activities mainly reflect lower share purchases by Jardine Matheson of its subsidiaries, principally of JC&C and Mandarin than in 2024 as we prioritize debt reduction in our holding structure for much of the year. The group has $15 billion of liquidity headroom to finance future growth.

Overall, the group's portfolio companies continue to be highly cash generative, supported by strong balance sheets and access to considerable liquidity.

Now turning to Jardine Matheson's corporate balance sheet and cash flows at the parent company level. Parent free cash flow rose 7% to $933 million and cash cover for the Jardine Matheson dividend remained ample at 2x. The parent company balance sheet, as mentioned, finished the year in a net cash position following net debt reduction of $1.4 billion during the year. The clean closing net cash position comprises 10- and 15-year bonds totaling $1.2 billion issued in 2021 at an effective interest rate of 2.6% and $1.2 billion of corporate cash held at leading high-quality regional and global banks, which together with further substantial committed facilities, gives the group ample flexibility for new capital deployment.

I'll now go through the performance of our core portfolio companies. For details, do refer directly to our company's respective results briefings. Looking first at Astra. Unless otherwise stated, the numbers on this slide are all shown in local currency, and like all the other portfolio company slides, are on a 100% basis. Astra saw positive progress in its 5-year TSR to 9.8% per annum, benefiting from a strong share price recovery in 2025. As Lincoln mentioned, Astra and United Tractors both launched buyback programs during the year aligned to TSR strategy.

Net profit in local currency was marginally down at IDR 32.8 trillion, amid a softer domestic economy with lower contributions from the coal and 4-wheeler businesses as coal prices moderated and the auto market contracted, partly offset by improved performances in motorcycles, consumer financing and noncoal mining.

Astra's contribution to JM's underlying net profit also fell modestly with a weakening rupiah offset by an increase in JM's effective shareholding. Astra's net cash position remains strong, providing capacity to fund its strategic priorities. Astra is, of course, a core part of Jardines. We continue to have confidence in its long-term prospects and will continue to support its investments in driving value and growth in its core franchises.

Hongkong Land has also seen a major improvement in 5-year TSR as it makes meaningful progress against its Vision 2035 strategy. At the end of February 2026, Hongkong Land had recycled $3.6 billion of capital since the new strategy was announced, representing 90% of their announced 2027 target. Accordingly, net debt fell by $1.5 billion in 2025 to $3.6 billion. And Hongkong Land, of course, made the same change as Jardines to exclude BTS from underlying earnings. Underlying net profit on this basis fell by 8%, principally due to lower average office rentals and the temporary impact of the landmark renovation on retail income in Hong Kong.

However, recurring dividend income to JM increased 5% to $271 million, reflecting Hongkong Land's commitment to grow dividends per share over time. Build-to-sell net profits recorded as a nontrading item were, as mentioned earlier, negligible after further impairments were taken against the residential portfolio, mainly in China. However, good progress was made in recycling capital from completing BTS projects, with inventory sales of $800 million in the year.

DFI's 5-year TSR also recovered strongly to 5.1%, with a 1-year TSR of over 90%. After paying a special dividend of $600 million to shareholders, DFI finished the year in a net cash position, providing it with capacity for continued investment in its stores, technology and future strategic priorities. In total, JMH received $575 million of dividends from DFI in 2025.

Mandarin Oriental's 5-year TSR was 13.5%, supported, of course, by the privatization. Mandarin finished the year with $856 million net cash following the disposal of the top floors of One Causeway Bay. Part of this, after meeting CapEx needs, was used to pay a special dividend of $758 million to shareholders, including Jardines in January 2026. And part of our share was in turn used to fund the privatization.

Underlying net profit rose 8% to $68 million with higher contributions from the Hong Kong and Tokyo properties.

Jardine Pacific reported higher underlying net profit of $191 million, up 28%. Its Engineering and Infrastructure businesses reported a 10% increase in underlying net profit, while the consumer businesses reported, as part of others, returned to profit. We're actively making people-investments to strengthen engineering and infrastructure and looking to recycle capital into this segment to expand and grow.

We're excited about the prospects of Gammon Construction in Hong Kong and of JEC regionally and actively investing behind these management teams. And Jardine Pacific continues, of course, to provide a valuable flow of recurring dividends to the JM parent.

Finally, looking ahead to 2026, I'd like to note that as a result of the tremendous work in 2025 on capital recycling and simplification activities, our underlying earnings will exclude a number of items that contributed in 2025. Principally, these are the disposals of DFI and of our Vinamilk shares. Additionally, we will shift in 2026 to accounting for Zhongsheng as an investment rather than an associate. So that only dividends rather than a share of earnings from Zhongsheng will be recorded in our underlying earnings. After adjusting for these changes, our pro forma 2025 underlying EPS exit rate base for your 2026 estimates is $0.39 lower at $5.33.

And with that, I'll hand back to Lincoln.

Thank you, Graham. So to conclude, 2025 was a productive year for Jardine Matheson as we continue to evolve from an owner-operator to an investment company. Across the portfolio, we recycled $4.8 billion of capital and underlying net profit grew 11%. At JMH itself, parent free cash flow increased by 7%. The dividend is proposed to grow 4% to $2.35 and the balance sheet moved to net cash, providing investment flexibility. And in recognition of this, we're pleased to see 5-year TSR improved to 8.8%. However, these are just baby steps to turning Jardine Matheson into the outstanding Asian vehicle we envisage, and there remains a lot to do, both on our portfolio and for new investments.

We're going to push ahead in 2026 to drive performance as a lean and focused investment company. We'll continue to actively recycle capital. We're strengthening our investment team, and we're actively looking for new pillars to grow our earnings in the future as we strive to deliver top quartile TSR.

Turning to guidance. Given the current uncertain political environment, both globally and in some of our key markets, we expect underlying earnings in 2026 to be broadly in line with the $5.33 base Graham just mentioned. However, the resilient returns and cash-generating capacity of our portfolio as well as comfortable cash cover gives us confidence to guide to a full year JMH dividend for 2026 of at least $2.45 per share, up a further 4%.

At our Investor Day on the 16th of June in Hong Kong, we'll lay out in greater detail how we are executing against our strategy and financial objectives. We'll cover our capital allocation strategy and then also share our vision for what Jardine Matheson can become. We're making progress as an organization. I need us to move faster and with deliberation, and I'm pushing the organization to do so.

Thank you. And we will now open the floor for Q&A. So Suzanne, over to you.

Thank you, Lincoln. We will now take your questions. So please just raise your hand if you have a question. Please state the name of yourself and your organization. Karl?

This is Karl Chan from JPMorgan. First of all, Lincoln, nice to meet you. Finally, we get to meet. So obviously, the first question is more for you. So just curious what is your personal KPI for yourself after you onboarded in JM? And what's your #1 priority this year? So I think investors will be curious to know. And that's my first question.

My second question is on capital recycling. So obviously, we have done quite a lot last year. So just curious what's next? And then what would be our strategy or major direction or plans for capital recycling? That's my second question.

And my last question is, in your perspective, what is the best way to narrow NAV discount? So obviously, I think, say, when we look at Hongkong Land results, I think the key priority from Hongkong Land is also on narrowing the NAV discounts, right? So from your perspective, what is the best way to do that? That would be my last question.

That's a lot of questions, but thank you, Karl, for -- nice to meet you as well. I can first go through my KPIs. And these are not theoretical KPIs, this is what was approved with our Board of Directors yesterday. So my principal KPIs are split into 2 parts: financial and nonfinancial objectives. My financial objectives, like, for this year is to drive -- first objective is to drive underlying cash flow above our portfolio budget.

Now why above? Well, you don't need me to deliver the portfolio number. You have executives within the company who are responsible for delivering it. Why we exist at JMH is to create additional alpha within our portfolio. So I measure myself as -- if I just sit back and our portfolio delivers, it isn't good enough. We need to generate above and beyond, cash flow what they are delivering, which again is our purpose.

The second is we have a capital recycling number, and this is a sell number, which is we're targeting a certain number of closed transactions to recycle and generate additional exit capital for our businesses.

So those are my financial KPIs. My nonfinancial KPIs is to kickstart our investment program, which combines starting to look at new transactions, ideally putting forward transactions to an investment committee, hiring and improving our team. And then I've also taken a specific KPI for Astra 1-year TSR. Given the importance of Astra for our business, I hold myself personally accountable to drive that business. Those are my short-term incentives.

My long-term incentives, which come in the form of stock-based compensation, are principally tied to absolute TSR targets for JM over a 5-year period. And the vesting of those options are in 5 years and tied to delivery of TSR at that time. Those are KPIs.

In terms of priority, we need to build the team. This -- we are -- it is a change culture we're getting to at JM. Being an owner-operator, you have very large functional organizations in a sense to command and control and put compliance around your portfolio companies. We're back into a world of recycling capital. So what do you need? You need investors. You need people who are accountable, know how to manage businesses, know how to partner with our portfolio companies. So there's no bigger priority right now than getting high-quality investment professionals side-by-side with me to help us drive the business forward.

In terms of capital recycling, there's 2 sides of this: There's selling and there's buying; and putting that capital to work. In terms of selling, the way we look at it is, we have absolute TSR targets we're trying to achieve. Anything that we don't think is going to achieve that is going to be in play, right? Some businesses, we may have turnaround plans and performance improvement plans that get the long-term improvement of that business better. But there are some assets in our portfolio we just don't think is going to deliver our long-term hurdle rate. So those businesses, we're actively looking to divest, partially sell down and find other ways to get capital out of them.

In terms of new businesses or new capital allocation, our buyback program is an example of where we see value. Our buyback program in Astra is an example of where we see value. We will, at some point, look at new things, right? I know some of our investors would like us to recycle capital within our organization and just move capital around. That is not why I'm here, right? Jardines needs new pillars for growth. And one of the things we've worked on with our Board the last week is setting guidelines for what good acquisitions will look like, and that's something we'll get into more in June.

And the last thing is, NAV discount. You should go talk to the investors on what matters to them. But for me, kind of on a pure corporate finance basis, a NAV discount exists when people see the capital is dead asleep, right? What we're trying to do is show active management of capital, movement from lower to better quality capital. We're just going to do this. Whether people want to adjust the NAV discount, is out of our hands.

Thank you. Raymond?

This is Raymond Liu from HSBC. Welcome. Great to meet you again, Lincoln. So I got 3 simple questions here. The first question is actually about -- something similar about priorities. So like in the PowerPoint presentation, we see there's a lot of priorities, a lot of objectives you want to achieve. So like, can you share with us like what are the 3 key major priorities that you want to achieve, so that to improve JM, to be transform a much stronger JM down the road? This is the first question.

And the second question actually is about capital recycling. Like if you look at the capital recycling in 2025, it was amazing, close to USD 5 billion. So should we expect the momentum to continue in terms of capital recycling in 2026 or onwards?

So the last question is about Mandarin Oriental. So following the privatization of Mandarin Oriental, so can management share with us more about -- like, how it's going to unlock the value of this hospitality business?

Okay. I'll give you 2 priorities. You asked for 3, right, but we should prioritize. So actually we really have 2. Team, Astra. That's where my time is, build the team, focus on Astra, get Astra to think about TSR and how they can generate value, no different than how Michael Smith, Laurent and Scott Price do. That is my operating priority, to really help Astra get to that next level. Again, with some management changes coming in the coming months, I think we're very excited about partnering with them to do this. So that's it. I don't have a third priority at this point.

Capital recycling, please don't take $4.5 billion and straight line it for the next 5 years. It is completely not within our control. Like, there's stuff going on, right? The stuff -- like, we, at the JM level, have capital recycling efforts at assets where we control practically 100%. Hongkong Land has their own capital recycling program, which Mike has talked about. Scott has his own capital recycling program, which he is driving. But what we can drive is the rest of JMH. Astra has their own capital recycling program. It's the other parts of the JMH portfolio where we practically control -- we either control or largely control, we're going to be actively driving recycling there.

And then on MO, we're just at the beginning of opening new locations. I mean, to be frank, like every time I open LinkedIn or I get an MO feed, they're opening something somewhere else, right? So as you can see, we're super excited about this. We are back in a position where this brand is growing again. So we want to give Laurent and his management team the next couple of years to grow this, right? It's doubling the number of hotels we manage. It's not a -- I would say it's a very realistic ambition. If we're able to do that and keep seeing long-term pipeline, then we can talk about long-term equity value and what we want to do with it. But the reason we wanted to privatize MO is just give them 100% focus on driving new high-quality hotel openings.

This is Jeff from CLSA. So my only question would be maybe want to hear Lincoln, your assessment on what is the asset-light strategy for Jardine Matheson as we look beyond the next 3 to 5 years? And maybe on top of that, is there any particular sector or geography that you are the most interested in?

Look, I always look at a business like this and the scale and size, it's like a big boat, right? And sometimes boats lean too much in certain directions, right? We are a very asset-heavy business. And not to say asset-light is better than asset heavy. It's just about relative risk. You want different types of risk within your earnings profile. It's just like we don't want 100% of our earnings to come from one place. In a sense, right now, we are actually too concentrated in earnings from 2 locations. Diversification from it is a good thing. right? So this is how I look at my job as a capital allocator within Jardine. It isn't to say that thing is beautiful and amazing, let's run there. It's all about relative risk.

Our shareholders need dividends. Our shareholders want steady EPS and DPS growth. So us going and putting $10 billion in AI, that's -- there are better people to go invest with to get that allocation. We're about balancing the boat here and giving steady returns and a growing dividend. That's what we want to do.

Now to take examples of what we call an asset-light business, you don't need to look outside Jardines. Look within Jardines. Mandarin Oriental, hotel management business is an asset-light business. We don't need a ton of capital to open new hotels. We're partnering with great location owners to bring our hotel brand to them. Why we've highlighted Jardine Engineering? This is another example of an asset-light business. This is a services business that does a lot of hard asset management and support. That is an example of a business that compounds much easier than, say, real estate where you put money in the ground, you need to wait 5 years to get capital back. It's not to say one is better than the other. We just have a lot of this, and we need some other types of growth.

You can ask Graham questions, too.

Yes. Just you put a lot of emphasis on the KPI, i.e., the total shareholder returns targets, and I saw that you did quite well, on 8.8%. Do you have any target in mind? And when you talk about hurdle rate being one of the criteria for your M&A or capital allocation, can you give some more color on that? That's the first one.

The second one, I think, I'm not sure whether it is for Graham, just on the assumption that this year or the guidance that this year, the earnings going to be stable year-on-year. Can you give us some more color on how do you come up with that guidance?

And secondly, just again, your amazing job in turning net cash on the holding company level. Given that now obviously, Lincoln ticking up a lot more proactive job in terms of capital recycling, do you have, in your mind, what sort of level would be a more ideal level of net debt or net cash on the holding company?

Do you want to go first?

Sure. I mean, obviously, in coming up with our guidance, we go through a long and detailed bottom-up process with our portfolio companies. And to a very large degree, we are reflective of what they have in their forecast and what they and their Boards see as a sensible outlook. Right now, of course, of the last week -- last 2 weeks, we've been placed in a world where there's a whole new sort of left field element of uncertainty arisen. And we also see political uncertainty in 1 or 2 of the markets that we are heavily invested in.

And so at this point in the year, I think it's -- it would be heroic to say we know exactly how things are going to conclude and how quickly probably, is the most important thing, they're going to conclude in the Middle East. And so despite having good confidence in our businesses, we have to be modest and recognize that there's a more than ordinary amount of uncertainty at this point in the year. We'll obviously come back to that as we get to the half year, and we'll obviously know a little bit more about how the year is going to shape up.

In terms of an ideal level of gearing, look, I mean, Lincoln being brought into the company, I suppose, initially might have made some people think, well, sort of, "Is Jardine turning into a private equity firm, and we're going to gear up the balance sheet to, no disrespect, 6x EBITDA and where, here we go?" That is one thing that is not changing. We will continue, and I think Lincoln is very positive about this, to run our businesses prudently and with a high degree of margin for error and indeed, margin for taking advantage of opportunity within their balance sheets. But we don't have a number. I'm not managing to 5% down to that number. That's the output of actions that have been undertaken through the portfolio companies.

And as you probably heard through the presentation, the point of doing that is not to sit on a big pile of cash. It's to be ready to invest in finding those new opportunities, both within the portfolio companies in adjacent areas to their existing franchises and the core parts of those franchises that we believe have good prospects for returns and growth in the future, but also at our level in looking to build new verticals that we can potentially see as long-term growth drivers for the group as a whole.

So look, there's no rule that says we have to be single-digit gearing. You've seen over the last 5 or 6 years, we've been well beyond that, but don't expect us to be popping up in a couple of years' time with 70% gearing. It's not going to happen. That's not who we are.

Okay. So then, your first question. Look, the way I look at what we have to be, right, it's a war for capital out there, right? Investors have infinite options to put their capital. So for us to be -- what I want us to be is an outstanding option or a top-of-mind option if people want a diversified Asia allocation, right, of a managed portfolio, I want them to look at us. Now what is that benchmark?

Well, there's a whole bunch of ways that capital allocators can invest in Asia. You can invest in indices, you can make your own basket and portfolio. You can put it in private capital. So for me is we are liquid, which is an advantage. People can come in and come out at any time. But we want to be that option. If somebody is looking to beat index but not be locked up for 5 to 10 years, we want to be in that sweet spot of hitting that total shareholder return on a regular basis. I think if we're able to do that, we'll be as competitive as capital as anything.

We will not use relative TSR. Like I don't think -- I do not think about our performance relative to other conglomerates in Asia, but that is not a high enough benchmark for us to clear. We -- and that's not how investors see us. No one has an Asia conglomerate allocation in their portfolio, maybe some people do. I -- some may be surprised. But you're competing for this capital, right? You're competing for high net worth capital, you're competing for institutional capital. If you're not in that sweet spot, there's no reason for people to invest in us.

So again, that's how -- we will present this in June in more detail. Graham does not want us to give a specific number at this point. But I think it's the right thing to do as we continue to refine it. But that's how I think about this, right? Like, we need to be fighting for capital to invest in that's out there every time we go out there.

Yes, George.

This is George Choi from Citi. Just one quick question. So over the last 2 years, we've seen a number of your major subsidiaries doing a number of major moves to enhance total shareholder return and obviously, a very decent job at that. But JC&C seems to be lagging behind a little bit. So just wondering what the reason behind that. Is it -- does it have to do with the complicated structure at that level?

JC&C is an intermediate holding company. That's all it is. Don't expect it to have a TSR strategy. Astra, we have a TSR strategy. Underlying assets, we have TSR strategies. But JC&C is -- again, it is not an asset we're looking to put more capital to grow with.

It's essentially an extension of Jardines. It's just part of our holding structure, and everything that they do will be aligned with what we do. So there's no point talking about separate strategies because they are very, very closely integrated with us as part of the holding structure for the group.

We have to respect the shareholders that are in JC&C, and we have to put the appropriate regulatory support for those shareholders. Outside of that, I look at our JC&C team and the Jardine Matheson team as one team.

This is Ben from UBS. So I actually have 2 questions. So the first one would be regarding on Astra. So there has been some uncertainty on the mining business in Indonesia. So do we have any current plans on what to do with this part of business? And do we see Indonesia and also mining business as a core part of our investment going forward?

And on the second part is, so we've done a lot on capital recycling and improving shareholder returns on our listed subsidiaries. So on our non-listed part, Jardine Pacific, do we have any plans on what we're going to do with it in the future?

Great questions. So the first thing, let's talk about what mining in Astra is, right? Mining in Astra is a combination of heavy equipment leasing, mining contracting and actual ownership of mines. So if -- now you need to break that up. The mining contracting and heavy equipment financing, leasing make up 80-plus percent. right? So mining ownership as a relative profit contributor is a smaller part of the business. It's not just what Astra does. So there's often a misconception about what this business actually does.

The mining contracting business is a much less asset-heavy business than a mine ownership business. We have been in the news around our mine ownership with Martabe. Where we stand right now is we are constructively working with the Indonesian government. We have been long-time investors, long-time believers in Indonesian market, and we remain confident that due process and fairness exists in the market. And I think we'll got up to a constructive conclusion with our discussions with the government around our ability to operate the Martabe mine in the future.

Jardine Pacific, if it's not blindingly obvious from how we're trying to position it is, I love our engineering and infrastructure businesses in Jardine Pacific. We should build that as a business. right? So Elton Chan, who's running that vertical from us, we should think and talk about Jardine Engineering and Infrastructure. We have great partnerships with Schindler. We have great partnerships with Balfour Beatty and Gammon. Both of those businesses are benefiting from the rebound with the Northern Metropolis here in Hong Kong. We're really excited about the growth of those businesses.

JEC, as I mentioned earlier, is an asset-light way for us to grow the business. I think asset services, right, things like HVAC maintenance, maintenance services, is a good asset-light compounding growth vehicle for us that we need to push beyond Hong Kong, right? And Elton Chan has pressure to expand that business for us. So I think you'll see us talking about that business more.

Jardine Pacific, I'm not -- when you -- as an outsider, you read Jardine Pacific, it's very hard to understand. But you look at Engineering Services, you look at Infrastructure Services, there are synergies we can build around the assets we have now. I think you'll see this come out in our strategy discussion in June.

And that, of course, is consistent with our other private business, which is the Mandarin Oriental, which, of course, has a strategy built around compounding returns out of an asset-light business. So at least 2 good reasons to think about the JM parent level with assets that you can't access otherwise.

Maybe let's take some questions online, and we can come back to the room later on as well. We have a question from Jayden Vantarakis of Macquarie. Congratulations on the results, and thank you for the briefing. Jayden has 3 questions, some of which I think we have already addressed, but I'll read it out.

He has a question on Jardine Pacific. As previously noted, it is under strategic review. What is the latest thinking on this portfolio? His second question is on net cash -- having a net cash balance sheet. Now we have more capacity to invest. Can management share into what sectors and geographies? The last question is, the dividend has been held at 40% payout and the guidance indicates that this will be the case for 2026. What is the thinking on capital returns at Jardine Matheson Holdings level?

Okay. You want to take 3, and I'll take one.

Sure.

You want to go first?

So I mean, one, I think you've covered. I think the net cash balance sheet, where and what, I think that. And in terms of the payouts, we will talk more about our mid- and long-term strategy for returns to shareholders in June. Right now, we wanted to signal greater clarity in terms of where we are on 2026, and I don't want to go beyond that at this point.

Yes. I think I tried to address this around where we want to deploy capital and talking about just balancing the risk we take overall. Again, there's several -- we want to build up our investment capabilities and team, but we're already in the market looking at new investment opportunities and refiring up our investment program.

I think geographically, the point that you've made around diversification into markets, still in Asia, but in developed markets to provide uncorrelated risks, if you like, uncorrelated earnings streams from our existing positions is important on a geographic dimension.

And I think in terms of sectors, obviously, as soon as we start naming sectors, that has an impact. But what I've heard from you, Lincoln, is actually, we need to look quite broadly in terms of sectoral exposure. If you just pick a sector, you kind of sort of force yourself down a rat hole that may not have very many opportunities of scale.

I have 2 additional points to what Graham is saying. We're not going to be kind of a thematic kind of collector of assets, right? You see this in some other conglomerates in the region where you have a honestly random mix of assets in healthcare, 30% in this hospital, over 20% in this diagnostic clinic, 40% in that hospital. It's not a business. Like go buy, go invest in a fund, right? The funds do this, right? And operating business like ourselves needs to be taking assets and building them, right?

And it goes back to something we started with in this presentation. It's about control. We want to own the majority of it. And then it's a LEGO block. You put things on top of it. If you have random 30% sticks everywhere, you're a LEGO block in somebody else's strategy, and that's not the way we want to deploy capital, right? We want to be able to put the best management teams we can in this business. We want to put governance in this business. Ideally, we want to own it for a very long time. But there may come a day, it no longer meets our hurdle. And then we want to exit it. Being a passenger, a 20% passenger in somebody else's car doesn't allow you to do that.

A question from Kyle Choi of Bank of America. When JM invests into new growth drivers, will you consider investments in completely new industry verticals? If so, what are the rough parameters? As a portfolio manager, would you consider reducing JM's ownership stakes in some of its listed investments, but retaining a controlling stake?

Okay. I think on the first one, this often comes up as a question, like how do we invest in a new area? Well, first off, many of our businesses, we already own, do expand in the new areas. How do they do it? They hire great people. They get great external Board members to support their growth. They advise themselves up to do the appropriate work to enter the segment. This is not -- we're not going to be doing greenfield new businesses from JM, right? That's not our line of business.

So people are concerned about that, that we're going to -- we're going to take somebody from Mandarin and suddenly go tell them, go build data centers, right? That's not what we're going to do, right? We're going to buy proven businesses with proven management teams and give them incentives to grow the business. This is the way we want to build this business going forward.

So that is going to be the model we do it, and we complement it with the Jardine way of working with our companies. We put world-class directors, independent directors on the Board. We put -- we put incentives for management aligned with TSR. We put the right Jardine Matheson representatives on the Board to work with the management, and we take the business forward. So that's going to be the way we drive and look at new capital.

And then for our public stakes, whether we would divest down, it goes back to our hurdle and return strategy. If we don't think -- that is just something we need to look at on a case-by-case basis. I would just say it's not a priority at this time for us to be divesting down our major positions.

I mean, fundamentally, for our core portfolio companies, we still see good value in the strategies that they're executing. And so as Lincoln said, it's not something that's front and center for us at all.

A question from John Lam of UBS. For JC&C, there are minority stake investments. How does Jardine Matheson view those equity investments?

Okay. I think you -- John is principally talking about our positions in Vietnam.

In Vietnam.

So I'm actually spending a lot of time on both our Vietnam assets because I actually see there's good value in them. These are good partners. These are assets which don't have immediate ways for us to exit them. So we're working with them as good partners as we have for a very long time and helping the management team and leadership at THACO continue to grow their business and helping the leadership team at REE continue to grow their business.

So I actually see, personally, good value to generate for us out of the Vietnam portfolio, and that's one of the reasons I spent time down there, to work with those management teams.

Back in the room, maybe. Are there any more questions?

Good.

More questions? Right. Okay. Karl?

Maybe just a quick follow-up on geographical exposure. Just curious what's our view on the China market now? In our upcoming capital recycling or asset allocation, do you think that we may expect -- do you think that we might expand our exposure to China?

China is not off the table. So I want to be black and white that we are looking at potential investment opportunities. The market has changed, right? All of you here cover the China market and are seeing the shifts in the market. It is actually becoming more of a yield-steady growth market, cash-on-cash return market, which is not dramatically different than some of the growth we're trying to add in the Jardines.

Now I think we need to be quite careful, right, in the types of sectors we go into. As a business, we've not wanted to be exposed to import-export cycles. And I think at this point, our import -- the import-export cycle is very difficult in China to invest in. We also need to be mindful in the current cycle, cost of capital in China is really cheap, right? We have attractive cost of capital, but we have many competitors in the China market, particularly around industrial, particularly around real estate that have a cost of capital half of ours, right? So that is a competitive disadvantage in getting into industries where we're competing with SOEs and private companies, which can borrow at half our cost of capital, that's a very difficult race to win.

So I would say we are looking at opportunities. The bar is high, but by no means would we say we're not looking at or China is off limits for us.

Thank you. Yes. We can take one last question. Thank you, Simon.

Just, you touched on about Astra being one of your priorities and focus. How do you think about Astra in terms of the challenge or some of the low-hanging fruit that you feel you'll be able to extract?

Yes. So I think what we -- what has happened with Astra and its strategy over the course of the last several years, it's very hard to understand. They have all these pillars of businesses. So what is the strength of Astra? There's an amazing automotive ecosystem, both in 4-wheeler and 2-wheeler. It's not just dealerships, right? Astra today is one of the leading manufacturers of auto parts in the country. It's one of the leading assemblers of vehicles in the country, a leading wholesaler in the country. This is both in 4-wheeler and 2-wheeler. So it's a diversified automotive play. It's got a dealership network that provides aftermarket services, used car services.

Now that's complemented by a financing business, which is part captive auto, part independent auto and part third-party unsecured financing. So again, this is a diversified business. And a mining business, which the market thinks is mines, but actually is mining contracting. These are the 3 pillars of Astra. In the future, the management team that will lead Astra into the future, first and foremost, need to come to the market and say, what is defendable about these businesses? What is the cash generation that comes with them? And what's the growth we can get by investing more in these 3 pillars? They're all market-leading businesses.

So we are extremely proud of what Astra has built in line with the Indonesian government priorities over the past couple of decades, and that's the first part you look at on.

The capital recycling is, Astra is in some businesses which are not market leaders. It's a similar mindset we have at Jardines. If it's not hitting return on capital, it's not a market leader, recycle it to build a fourth major pillar of Astra, which is what the management team is trying to do with healthcare or infrastructure. So this is what we're trying to do with Astra in this cycle, is not radically change what they want to do, not go -- get into AI or get into a radically different sector. It's compound these pillars and then start to build a fourth, fifth pillar around these businesses that are aligned with the strategic priorities of the country.

So that's a lot of my time. Look, we have a great management team at Astra, right? They are great at operations. It is thinking about capital allocation and aligning management with capital allocation in these businesses, is the work we have ahead with Astra.

Thank you. All right. Thank you for all your questions. If you do have more follow-up questions, as always, please reach out to us at [email protected].

With that, we will conclude our results presentation today. Thank you very much again for coming, and we look forward to seeing you again in June on our Investor Day.