Company meetings

A spotlight on three of the key companies we've met during the past quarter

We met the companies below and you can learn more on any of these by contacting the person at JM Finn with whom you usually deal.

Smith & Nephew

Price £16.64

52 week high-low £16.80 – £12.42
Net Yield 1.7%

Hist/Pros PER 27.6 –20.8

Equity Market Cap £14,498m

Health Care

Andrew Swift, Head of Investor Relations

Smith & Nephew (S&N) sells products and services linked to advanced wound management, orthopaedic implants, sports medicine and trauma. It has historically not been as good as peers at selling into these markets: its revenue growth has averaged around 2-3% p.a. whilst the wider market has grown by 4% p.a.

Recently appointed CEO Namal Nawana is implementing changes to three areas with a view to accelerate growth.

Previously, the business had not fully understood the needs of its customers and had failed to appreciate that surgeons are typically the key decision makers. For example they failed to recognise that surgeons made the buying decisions and would always prefer a higher spec 4K keyhole surgery camera which S&N didn’t sell. Management have now reorganised the sales structure of the business to ensure that specialist sales stay in close contact with surgeons rather than generalists.

The company was slow to recognise the strength of their own products. However the renewed focus has helped to drive hip implants to market growth rates of 4% over the past two quarters, where previously it had grown at around just 1%.

Finally, S&N has historically not been as acquisitive as peers, but since Nawana became CEO, the business has announced four which operate in markets that are adjacent to S&N’s existing businesses. Osiris, a fast growing regenerative medicines company which focuses on skin and bone grafts is one such company. It is expected to accelerate growth from S&N’s advanced wound management business.

Initial signs of the turnaround look promising, but whether it achieves sustained market growth rates, and beyond, remains to be seen.


Price HKD 326
52 week high-low HKD 431 – HKD 215
Net Yield 0.3%
Hist/Pros PER 33.5 – 29.9
Equity Market Cap HKD 3,160,826m


P H Cheung, Investor Relations Director

If the stock market gave out their equivalents of man-of- the-match awards, Tencent would have probably won it a few times. Back in 2004 the shares cost you HKD 0.85 each. Today you’d have to fork out close to HKD 330 for the same share. The company now has a market capitalisation of HKD 3.1 trillion or £310 billion. By way of comparison, Royal Dutch Shell have a market capitalisation of £192 billion.

At first glance Tencent can appear to be a bit of a Chinese conglomerate. Its businesses cover e-games, music, video and books online and they own the QQ and WeChat apps. They have over one billion users on their chat apps and have used the platform to promote everything from e-payments to launching new e-games to pushing their new and fast growing cloud platform. You can do a lot with over one billion active users.

Our meeting focussed on the launch of their fantastically popular PUBG shooting game. Using your smart phone, you get to run your avatar around a battleground fighting anonymous people or your friends.

PUBG has 180 million active users and the plan was to monetise the game by allowing players to buy $5 shirts for their avatars. But in 2018, the Chinese government stopped giving permissions for violent and potentially addictive games to be monetised in China. The expected annual revenue from PUBG post-Chinese permission was estimated at $5 billion. With good margins, that would have been a dial moving event for Tencent’s operating profit last year.

Tencent have since given up on the idea of getting permission in China and now direct their players to an alternative, and permissioned but less exciting “Elite Force for Peace” game.

Jardine Matheson

Price $64.18
52 week high-low $72.05 – $56.44
Net Yield 2.3%
Hist/Pros PER 13.9 – 13.5
Equity Market Cap $47,376m


John Witt, Group, Finance Director and Matthew Bishop, Group Treasurer

Jardine Matheson Holdings Limited (JMH) is often thought of as being the equivalent of a Far Eastern Investment Trust Company with a very diverse collection of businesses under its full or partial ownership. Interests cover Asian land investments, supermarkets and convenience stores, car sales and distribution, engineering and airport infrastructure, and the Mandarin Oriental hotel group.

From its foundation in 1832 the company has grown by doing business in China and the Far East, they do not operate in India, South Korea and Japan. Over the last twenty years EBITDA or cash profit has grown at 12% pa which has meant that JMH has proudly beaten the Hang Seng Index.

The company’s strategy is to make investments that benefit from their large and increasingly affluent populations in the markets where they operate. They manage their diverse base of investments by having JMH representatives on the Finance Committees of their subsidiary companies as well requiring large projects to be sanctioned by the local and JMH boards. Managerial targets are a mixture of returns and strategic targets aligned with their long term investment profile. We were assured that they had new management in place to deal with the problems at Dairy Farm, their supermarkets, hypermarkets and convenience stores business.

They say that the trade wars will have a short term impact on the business but that in the long term Trump’s policy will push Asia to being less dependent on the US.


Rio Tinto


Genus, Smith & Nephew, Roche Holding Ltd Genusssch., Novartis, Novo Nordisk




Imperial Brands, Nestle, British American Tobacco


CRH, Rotork, Ricardo, Bunzl Jardine Matheson,
Deere & Company


Wallgreens Boots Alliance, Saga 




Imperial Brands, Nestle, British American Tobacco






BP, Royal Dutch Shell, Total


J Sainsbury, RELX, Whitbread


Apple , Tencent


Schroder, Lloyds Banking Group, Prudential, Burford Capital


SSE, Pennon Group

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