00:00Walk us through the nuance. What's the key difference in your view?
00:03Yeah, I mean, I think we can't really control what people call us,
00:06but the association of conglomerate is sleepy capital,
00:10often related party transactions,
00:13where certain shareholders benefit over others.
00:17That is the overhang view of conglomerates,
00:19but principally, the issue why they have a discount is sleepy capital.
00:22It just sits there. It doesn't do anything.
00:24We're already showing the market.
00:26We're an active manager of capital, and that's what we need to be,
00:28and we need a team to do this.
00:30We need to look at our assets every single day.
00:32Does it hit our hurdle rate of returns?
00:34Is there a better place to allocate that capital?
00:36In three years, four years, five years, is that return on capital going to decline?
00:40We need to be actively looking at every single one of our positions in a group
00:43and making this day-to-day evaluation.
00:45There's always investment opportunities out there,
00:48and so we need to think about can we get access to those opportunities?
00:51Are we the right owners of those businesses?
00:53This is just about active capital management of everything that we have,
00:56and we hope if investors have seen over the past six months
00:58we're already taking active decisions to exit some weaker proportions of our portfolio
01:03and also reallocate capital toward parts of our business we're more excited about.
01:07And I guess just to close the loop on one of the concepts there,
01:10in terms of the holding structure, the structure at which you return money to shareholders,
01:14does anything change at the very top end of that,
01:16or is it really how you approach or the philosophy that you take when you look at the capital?
01:19Yeah, the holding company is what it is, right?
01:22This is something that's been there for a long time,
01:25and I think to unwind it is not a principal priority for us.
01:29But looking across our entire holding structure,
01:31there are inefficiencies in our holding structure,
01:34and there are things we're already doing about it.
01:36You can see in our effort earlier in September to privatize Mandarin Oriental,
01:40this is a perfect example of this.
01:4288% owned by Jardines, 12% owned by minority shareholders,
01:46very little public float.
01:48We could triple the earnings of this business.
01:50The stock would barely move.
01:52It is absolutely wrong to have that business in a public domain.
01:55It's why we basically sprinted to take that company into the privatization.
02:00And we feel so excited to work with Laurent Kleinman
02:03and his senior management team to build that business over the next four to five years
02:07and give them the chance to realize the equity return that that business deserves.
02:11It would never be able to do that under a public ownership.
02:14And would that be the same philosophy across your portfolio
02:17when you look at the most tightly held of your holdings?
02:22Is that the approach to go that you might look?
02:25Is the orientation to privatize those that are as tightly held?
02:28It's a great question.
02:29But I would say we are always looking at that.
02:32But don't assume we will use the same tools.
02:35Right.
02:35In terms of the cadence at which you're turning over your capital in the portfolio,
02:40will the next few years see a lot more frequent moves than the last few?
02:46It's hard to actually predict.
02:48But as a person who worked in private capital for the past decade,
02:52you're always kind of behind.
02:54I kind of wake up every day.
02:56It's like, look, are we doing enough for our business?
02:58Are we driving our business hard enough?
03:00So there's not like a let's do one thing a quarter.
03:02We should do everything that we should every quarter that we can.
03:06And that's my mindset toward taking over that's this business is like it's not we should always be trying to do more.
03:12We should be always trying to push returns in our business.
03:14And the fact that the holding company, let's put it that way, has been around for generations just underscores the fact that it's remained relevant through the times.
03:21And when you look at, not to say that they're not valuable businesses, because they are,
03:25but is there an orientation to look at the portfolio and maybe increase the amount of new economy companies in there?
03:34How do you look at that?
03:34So I think without getting too specific at this point, what we have is already a very, very large asset base.
03:40David, you and I wanted to start a new investment firm today.
03:43We just had money.
03:44We would be starting to look at things like AI data centers, because those are clear growth drivers in Asia.
03:49I need to think about that.
03:51But I also need to think about the types of assets we have in our portfolio.
03:55Today, Jardine's is very overweight, a portfolio that's Hong Kong, Southeast Asia.
04:00It is very overweight, heavy asset industries.
04:03So as I think about managing our portfolio, the first thing I wake up and thinking about is not new industry.
04:10It is mixing the types of returns we get from the capital we have in play.
04:14We're looking for balanced return.
04:16We're not looking for spikes up and down.
04:18If you see what we're going to try to do in Jardine's over the next five years, it is steady increase of dividend per share.
04:24It is steady increase of our over-earnings and a recycling of lower-quality earnings and a higher-quality earnings.
04:30What that is and what industry you have to see.
04:32If you do that, it's going to be interesting.
04:33But yeah, it's increasing the dividend.
04:35We heard it here first.
04:36I guess in terms of just the—well, I had to just ask you, because headquartered in Hong Kong, listed in the U.K., listed in Singapore, and of course the others are listed in many places.
04:46Is it even part of the conversation to have a dual listing here in Hong Kong?
04:50I'm sure that's come up.
04:51I think if you think about it, it's right listing structure for right company.
04:56It's not simply—okay, having an extra listing here, is that good for the group?
05:02It's not as simple as that.
05:04We need to think about the investor base in Hong Kong, the right mix for one of our businesses, we should consider Hong Kong as an option.
05:12But it's not like a simple—I get a lot of banker books that say, this will naturally kick your multiple up a certain percentage.
05:18Well, that's their incentive to do that.
05:19It's not so easy.
05:21I often describe it as—this is banker math, right?
05:23It's not real math of what happens with your business.
05:25Okay.
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