DBS initiates coverage on Jardine C&C with ‘buy’ on ‘strategic exposure’ to Vietnam, Indonesia

[SINGAPORE] DBS has initiated coverage on Jardine Cycle & Carriage (C&C) with a “buy” call, on the basis of its “strategic exposure” to Indonesia and Vietnam, the “dual Asean growth engines”.

The bank on Monday (Feb 23) assigned the investment holding firm a target price of S$38.50 – 11.6 per cent above its latest closing price of S$34.50 on Monday.

DBS analysts Elizabelle Pang and Sachin Mittal said that the outlook for Astra International, a “dominant earnings driver” for Jardine C&C, is “constructive”.

Jardine C&C, a member of the Jardine Matheson Group, has a 50.1 per cent stake in Astra, a diversified Indonesian conglomerate with operations spanning automotive manufacturing, components and financial services; it also has other strategic interests in South-east Asia.

Beyond Astra, Jardine C&C is poised to benefit from growth drivers in Vietnam, Pang and Mittal said. They cited the management’s plans to replicate an “Astra playbook” in Vietnam through mergers and acquisitions (M&As) and capital recycling, which could unlock value and trigger a re-rating.

Indonesia exposure via Astra stake

DBS noted that Jardine C&C and Astra are expected to provide clearer outcomes from their strategic review by the end of H1 2026.

“We see this as a meaningful re-rating catalyst, potentially translating into sustained share buybacks, higher dividend payouts and selective asset recycling,” analysts from the bank said.

They maintained a “constructive” view on Astra, and forecast its FY2026 earnings to come in at around 4 per cent above consensus, amid resilient fundamentals, despite persistent technical headwinds.

Astra’s risks related to Martabe gold mine appear to be “mostly priced in”, the analysts said, noting that this presents an “attractive entry point” via Jardine C&C.

The Indonesian authorities are reviewing a decision to take over the mine after revoking the permit of mine operator Agincourt Resources, which is part of the Astra conglomerate.

The bank added that Jardine C&C’s Singapore Exchange listing and broader regional portfolio may reduce sensitivity to Indonesia MSCI-related volatility and support a cleaner re-rating path over time.

However, it said that MSCI-linked developments could “continue to cap near-term re-rating”.

The MSCI’s warning of a potential downgrade of Indonesia from emerging-market economy status to a frontier-market one triggered sell-offs in January.

Vietnam exposure

Under its medium-term strategy, Jardine C&C’s management plans to replicate its “Astra playbook” in Vietnam, which offers “incremental diversification” opportunities through its stakes in auto player Truong Hai Group (Thaco) and renewable energy player Ree Corporation, DBS said.

Noting that Jardine C&C is prioritising majority stakes and M&As in Vietnam, the bank remarked that “M&A execution and capital recycling” – for which clearer visibility is expected by end of H1 2026 – could be “as key re-rating catalysts”.

Vietnam’s low car ownership supports a 16 per cent compound annual growth rate for passenger-vehicle sales, DBS said.

With Jardine C&C’s share of Thaco’s earnings up 10 per cent year on year in H1 2025, supported by robust growth in automotive earnings and resilient margins, rising export exposure could drive further earnings growth, the bank said.