Jardine Matheson Holdings Limited (J36) Earnings Call Transcript & Summary

Good morning, and welcome to the Jardine Matheson 2021 Half Year Results Presentation. You should be able to see the slide deck on your screen, and you can also download the deck. [Operator Instructions]. In today's presentation, I'll summarize significant developments across the group during the first half of the year before covering our results, including the performance of the individual group companies, and sharing some thoughts on capital allocation and the outlook for the group for the rest of the year. But let me start by saying a few words about COVID-19. Encouraging growth of profits in almost all our major businesses in the first half reflects returning demand in a number of markets and countries and the work of our teams to proactively manage costs. However, COVID continues to create significant operating challenges across our markets as well as disruption and rapid change. And we're still a considerable way from a full recovery in the majority of our businesses. In North Asia, the continuing closure of borders, the consequent impact on tourist numbers and local pandemic-related restrictions have significantly impacted our consumer-facing retail, restaurant and hotel businesses. In Southeast Asia, Astra's businesses in Indonesia continue to face extensive disruption due to pandemic-related restrictions. And there has unfortunately been a significant worsening in the number and seriousness of cases in Indonesia more recently. Similar challenges are also being faced by our other businesses in the region. Across the group, immense efforts have continued to be made to respond to and address the challenges caused by the pandemic. And I would like to express thanks to our colleagues and partners for their dedication and resilience throughout the period. While these are clearly still difficult times, we are confident that in time, the high-growth economies of our home markets will rebound. Jardines remains resilient and well positioned to achieve its long-term growth objectives across our region, reflecting our clear strategic aims, the diversity of our businesses and their underlying business models. There have been a number of significant developments in the group in the period. In April, we completed the previously announced simplification of the group's holding structure by acquisition of the 15% of Jardine Strategic that Jardine Matheson didn't already own. This creates a more transparent ownership structure for the long term, enhances Jardine Matheson's earnings per share and dividend cover and further increases the group's operational efficiency and financial flexibility. In March, we announced the formation of a strategic partnership with Hillhouse Capital, a leading Asia-focused private equity firm, in order to drive innovation and digitization in the group's portfolio companies. Shortly after the end of the period, the group announced the strengthening of its strategic partnership with Zhongsheng, now the largest automotive dealership group in China, through the transfer of our Zung Fu Mercedes-Benz auto dealership business on the Chinese mainland to Zhongsheng. As previously announced, the $1.3 billion consideration will be settled through a combination of cash and new Zhongsheng shares. And as a result, the group's shareholding in Zhongsheng will increase. At the same time, the cash component of the consideration will be applied to reduce debt at the Jardine Matheson level. Aside from these developments at the group level, the operating businesses have, of course, continued to invest organically in the period for long-term growth, which remains our first priority. Before I focus on performance, let me remind you of the structure of the group. As a result of the completion of the group simplification in April, Jardine Matheson's economic interests in the underlying businesses rose in the period as shown on the slide. Turning to the group's results for the first half of the year. As in the past, I'm going to focus on underlying profit attributable to shareholders, which the group uses as its key earnings performance measure. Underlying profit excludes nontrading items as defined in the group's accounts and is intended to provide a clearer understanding of the ongoing business performance of the group. For the first half of 2021, revenue from subsidiaries was $17.5 billion, 10% higher than the same period last year but 13% below the comparable period in 2019. The group's underlying profit in the period was $615 million, 65% higher than the first 6 months of 2020 but 17% below the comparable period in 2019. We booked a nontrading loss of $732 million in the first half, which I'll return to shortly, and this compares to a nontrading loss of $1.1 billion in the same period last year. Underlying earnings per share were 84% higher at $1.86. This increase reflected both business recovery, which constituted approximately 3/4 of the growth, and the effect of the group simplification on earnings and issued share capital, which comprised the remaining 25% of underlying earnings per share growth. The Board has declared an interim dividend of $0.44 per share, unchanged from last year. As we explained in the announcement of the group simplification in March, we will assess the extent of an uplift in the final dividend at the time of our full year results announcement in the light of full year performance of the group and long-term earnings growth. Moving to the contribution of individual businesses to the group's profit. Jardine Pacific saw a good recovery in performance in most of its businesses during the period, while Jardine Motors enjoyed higher contributions from all its businesses. Hongkong Land saw higher profits from the development properties business than in the same period last year, while the contribution from investment properties remained resilient. Dairy Farm saw its convenience stores and its associate, Maxim's, perform better than in the first half of 2020. But this was unfortunately not enough to offset a loss from the group's investment in Yonghui and reduced profits from grocery retail, health and beauty and eye care. I'm pleased to report that Mandarin Oriental recorded a lower loss in the first half of last year, although the overall industry is far from operating in normal conditions. In Southeast Asia, Astra's performance was significantly better with the improvement primarily driven by its automotive business, but with all major sectors recording improvement. Jardine Cycle & Carriage saw a materially higher contribution both from direct motor interests and other strategic interests. The nontrading loss of $732 million for the first half primarily reflects the regular semiannual independent revaluation of investment properties in Hongkong Land, a loss of $635 million, and a similar $71 million revaluation loss in respect of the Causeway Bay site in Mandarin Oriental. Both losses were, of course, noncash and unrealized. The $25 million restructuring charges relate principally to the refocusing of Dairy Farm's Indonesian business. I'll now turn to the performance of the individual operating businesses before addressing the group's net debt position and consolidated cash flow. Jardine Pacific reported an underlying net profit of $76 million in the first half compared with $53 million in 2020. The group's privately owned portfolio of businesses remains resilient and cash generative and has seen a good recovery in performance across most businesses in the period. JEC improved its contribution from $12 million to $18 million, with its Hong Kong engineering units continuing to perform well, and there were also higher contributions from improving regional markets. Jardine Schindler saw somewhat improved profits against a backdrop of continued highly competitive markets. The restaurant business saw better results in most banners due to the strong delivery sales and the benefits realized from ongoing process reengineering projects. In Transport Services, HACTL's performance was strong with a profit contribution of $15 million compared with $11 million last year, driven by productivity improvements and conditions in the global air cargo industry, which has benefited from record levels of demand. There was also a reduced loss from Jardine Aviation Services, which benefited from ongoing operational efficiency initiatives despite flight volumes remaining very low in the period. Gammon delivered better performance with its operations in Hong Kong less impacted by COVID-19 than many businesses. Its order books are at record levels at $6.4 billion. There was a slightly lower contribution from Greatview, which continued to see volume growth in both the Chinese mainland and international markets, but was impacted by rising raw material costs and higher selling expenses. Looking now at our motors businesses. Jardine Motors more than doubled its underlying net profit for the first half compared with the last year. There were higher contributions from both Zung Fu and Zhongsheng on the Chinese mainland, reflecting continued strong demand and solid margins in a market which has performed robustly. Within the total from the Chinese mainland, there was a 34% higher contribution from Zhongsheng, which reflects its performance for the 6 months from July to December 2020. The business in Hong Kong and Macau contributed profit of $9 million, caused by higher demand and better margins as we continue to launch a number of important new Mercedes-Benz models. This compared to a slight loss last year. The U.K. business delivered a substantial improvement in performance from the same period last year with profit of $16 million compared with a $28 million loss in 2020. The business was helped by the easing of lockdown measures and robust consumer demand. Hongkong Land's underlying profit for the first 6 months was up $394 million, up 12% from 2020 -- sorry, was $394 million, up 12% from 2020. There was a higher level of sales completions on the Chinese mainland than in the same period last year, boosting the profits of the development properties business. Market sentiment in the group's core markets remained stable and both sales completions and contracted sales are expected to strengthen in the second half of the year. The profit contribution from the Singapore business in the first half of 2021 was higher than in the first half of 2020, which was impacted by pandemic-related disruptions. In the rest of Southeast Asia, market sentiment remains weak in light of the ongoing impact of COVID-19 and related restrictions. Turning to Hongkong Land's investment properties. Contributions from the investment properties business remained resilient despite negative rental reversions in Hong Kong. The Hong Kong office portfolio continued to perform relatively well amidst the ongoing market downturn. There was a modest increase in new office leasing activity due to improved sentiment and a narrowing rental differential between central and other parts of the city. We expect the office portfolio to remain resilient, although the short-term outlook will depend on the timing of border reopenings and the subsequent pace of recovery. But in the medium term, we have full confidence that Central will remain as the preferred location for the financial services, legal and accounting sectors in the city. Trading at the group's Central Hong Kong retail portfolio benefited from a modest recovery in luxury retail market sentiment. Temporary rent relief continues to be provided by the group on a case-by-case basis. Singapore vacancy remained unchanged on a committed basis, and average office rents there increased. Trading at Wangfu Central in Beijing benefited from strong luxury retail market sentiment on the Chinese mainland. I'm pleased to say that construction has also started on Hongkong Land's flagship West Bund project fully on schedule. Dairy Farm saw sales of $4.5 billion in the period by its subsidiaries, 13% lower than the prior year. Underlying profit was 69% lower as lower profits from grocery retail and Yonghui were only partly offset by the better performance year-on-year of the group's convenience stores business and its associate, Maxim's. The profitability of Dairy Farm's grocery retail business was impacted by lower sales as the panic buying behavior, which the business benefited from at the start of the pandemic last year, was not repeated in the first half of this year. Grocery retail results were also impacted by ongoing challenging conditions in the Indonesian business ahead of the refocusing away from the Giant banner. The convenience stores business was lapping a period last year when it was badly impacted by movement restrictions and physical distancing requirements as well as temporary store closures on the Chinese mainland. And it was, therefore, able to deliver strong profit growth. Health and beauty performance in the period continued to be severely affected by the prolonged closure of the border between Hong Kong and the Chinese mainland and the consequent lack of business from tourists in Hong Kong. It was also affected by heavy restrictions on movement in Southeast Asia, which resulted in a significant reduction in footfall in miles. The group has continued to reinvest in prices to enhance the customer value proposition in health and beauty, leading to an improvement in both sales volumes and operating cash flow. IKEA's trading operations were disrupted by pandemic-related restrictions, which required store closures and restrictions on customer numbers. E-commerce performed strongly, however, and this, together with a stronger store opening program, led to higher sales than in the same period last year. In respect of its associates, Maxim's saw encouraging like-for-like sales performance in Hong Kong and the Chinese mainland, and it was able to report a smaller loss than last year. However, these encouraging results were partially offset by challenging trading conditions in Thailand and Singapore, resulting from the surge of COVID-19 cases there in the second quarter of 2021. Yonghui, however, contributed a loss for the period of $31 million compared to a $23 million profit for the comparable period last year. It faced challenging trading conditions with lower margins resulting from rising online competition and weaker performance overall than the same period last year when the business enjoyed strong demand due to panic buying by customers. Its sales compared with more normal 2019 year, however, were higher. Dairy Farm has continued to invest in its multiyear transformation program. And during the period, there's been a refocusing of the Indonesian business on Guardian, IKEA and the Hero grocery retail banner, and away from Giant. This change in strategy is a necessary response to changing market dynamics, particularly given the move by Indonesian consumers away from the hypermarket format in recent years. The group is closing nonperforming Giant stores and converting a number into IKEA stores and Hero supermarkets. It's also investing in building out the Guardian business. This restructuring will better position the Indonesian business for future profit growth. Moving now to the group's luxury hotel business. I'm pleased to say that all hotels were operational again during the second quarter this year, whereas almost all the hotels were closed in the same period last year. Nevertheless, in most markets, the demand seen by Mandarin Oriental remained largely domestic and leisure based. Mandarin Oriental reported a lower underlying loss of $67 million for the first half of the year. This loss was incurred by the portfolio of owned and partially owned hotels as the management business approached breakeven due to increased management fees and lower operating costs. The improved overall performance also reflects continued government financial support in some markets and the group's ongoing cost containment measures. In Asia, business at the group's Chinese mainland hotels remained strong. While in Southeast Asia, operating conditions generally worsened in the second quarter due to a resurgence in COVID-19 cases and low vaccination levels. In Europe, the Middle East and in America, COVID-19 restrictions have slowly eased and occupancy levels have started to recover. We were delighted that the Mandarin Oriental Ritz, Madrid reopened in April after an extensive restoration. And the group also signed 2 management contracts for properties in the period in Hangzhou, China, and Da Nang in Vietnam. Mandarin Oriental continues to have a robust pipeline of future developments. And the medium- and long-term prospects for this market-leading hotel business are strong despite the short-term trading challenges it has been facing due to COVID-19. JC&C reported an underlying profit for the period of $346 million, substantially higher than the $138 million profit it made for the first half of 2020 when the emergence of the pandemic and the implementation of major lockdown restrictions in the second quarter materially impacted the business. Astra's profit contribution to JC&C increased by 71% to $293 million. This was primarily due to a significantly better performance from its automotive business. There was also a materially higher contribution from the group's Direct Motor Interests compared to a loss last year, with higher profits in Singapore where car sales grew. In Indonesia, Tunas Ridean saw improved profits from its automotive and financial services businesses, while the financial performance of Cycle & Carriage Bintang in Malaysia benefited from improved sales due to a sales tax reduction as well as cost-saving initiatives. Other strategic interests delivered a 138% increase in profits, largely due to the continued recovery of THACO's automotive operations and its real estate business. Siam City Cement saw a 19% better performance than the same period last year, mainly due to higher cement volumes in its regional operations, although prices remained under pressure and margins were impacted by an increase in coal prices. REE's contribution was considerably stronger than the same period last year with improved performances from its power generation and water investments as well as solar energy projects. JC&C received a similar level of dividend income as last year from its investment in Vinamilk. Turning now in more detail to Astra. Profit growth was driven across all major businesses with the largest contribution coming from the auto sector, which lapped materially worse performance last year due to the emergence of the pandemic and also benefited from luxury sales tax incentives in 2021. As the wholesale car market grew by 51% in the first half, Astra's car sales also grew 50%. And accordingly, market share was stable at some 53%. The wholesale market for motorcycles increased by nearly 1/3 and Astra's Honda motorcycle sales grew by 29%, with market share also maintained at 77%. Astra Otoparts returned to profit, having made a net loss in the same period last year. The contribution from the financial services division increased by 6% due to higher contributions from the consumer finance and general insurance businesses. Within this, net income from the car and motorcycle-focused financing businesses increased marginally. However, heavy equipment-focused finance operations delivered lower net income despite a strong increase in the amounts financed due to compression in net interest margins in the period. The group's general insurance company reported a 15% increase in net income due to higher investment income. The contribution from Astra's heavy equipment, mining, construction and energy division increased by 16%, mainly due to higher Komatsu heavy equipment sales and improved coal prices. Komatsu heavy equipment sales increased strongly following CapEx deferrals by customers in the prior year, but parts and service revenues were lower. Mining contracting operations delivered an increase in coal production, although there were lower overburden removal volumes. The group's gold mining operations saw a 5% lower sales at 176,000 ounces. General contractor, Acset Indonusa, reported a net loss, mainly due to the slowdown of several ongoing projects and reduced project opportunities. Agribusiness performed well with its contribution increasing by 37%, mainly due to improving prices. The group's infrastructure and logistics division reported a net profit compared to a net loss last year, mainly due to higher toll road revenues. Moving from the trading performance of our operating companies to the group's overall net debt position. At 30th of June 2021, the group's net debt, excluding financial services, was $8.1 billion and gearing was 14% compared to 6% at the 2020 year-end. This primarily reflects the acquisition of the Jardine Strategic minority shareholdings. In Hongkong Land, net debt decreased to $4.3 billion at 30th of June from $4.6 billion at the 2020 year-end. Net gearing was 20% -- sorry, was 12% at the 30th of June compared with 13% at the year-end. Dairy Farm's net debt at the 30th of June was $935 million compared with $817 million at the 2020 year-end, with the increase driven principally by investment in new IKEA stores in Taiwan and Indonesia. Mandarin Oriental saw its net debt increased from $506 million at 31st of December to $590 million at the end of the first half, reflecting investments made to develop the Causeway Bay site and increase the size of the Munich hotel as well as ongoing maintenance CapEx. Jardine Cycle & Carriage had a consolidated net cash position, excluding the net borrowings from Astra's financial services subsidiaries, of $40 million at the end of June 2021, compared to net debt of $854 million at the end of 2020. The change from net debt to net cash was mainly due to strong trading cash flows in Astra together with low capital expenditure and improved working capital management. JC&C parent company's net debt was $1.5 billion at the end of June 2021, in line with the previous year-end. The net debt within Astra's financial services subsidiaries increased slightly to $2.9 billion. Of course, the largest change from the prior year is at Jardine Matheson Corporate, reflecting the acquisition of the remaining interests in Jardine Strategic. The acquisition was financed from cash resources and an acquisition financing facility. As a result, the group has seen an increase in gearing to 14% due to the group simplification. The vast majority of the debt has already been refinanced through a combination of long-term bonds and revolving credit facilities with the group's relationship banks. Jardine's prudent approach -- funding approach remains unchanged. And as I stated at the time of the announcement of the simplification, debt reduction at the parent will remain a priority. Turning now to cash and liquidity. Cash flow from operations rose by $922 million. This was principally driven by higher operating profits than in the same period in 2020 and working capital inflows, particularly within Astra. I've already covered the largest items on the slide, which are the acquisition of Jardine Strategic and related financing. Other items were relatively stable compared to the prior year, and the group's businesses continue to be cash generative with robust balance sheet. On liquidity, the group has significant undrawn committed borrowing facilities and remains in a strong financial position with substantial capacity to finance future growth as reflected by the group's strong credit ratings. That concludes my summary of the performance and financial position of the group. Let me now briefly turn to capital allocation. As we've previously indicated, the group's highest priorities are, of course, organic investment and continued support for the dividend. Throughout the pandemic, we have invested for growth within our businesses and maintained our dividend. On the announcement of the privatization of Jardine Strategic, we were clear in our commitment to strong investment-grade credit metrics and therefore, to reducing the group's gearing to more normal levels. Accordingly, since then, we have paused any substantial inorganic investment, either in new M&A or buybacks. We have also placed some priority on securing cash proceeds as we strengthened our partnership with Zhongsheng through the transfer of the Zung Fu businesses on the Chinese mainland to Zhongsheng. We will continue to prioritize debt and gearing reduction moving forward using both organic cash generation and value-enhancing opportunities which arise from our normal process of portfolio capital allocation. As we see tangible progress, for example, as cash proceeds from Zhongsheng are received, we will also start to reconsider inorganic investments. The timing of completion for the Zung Fu China transfer is, of course, subject to regulatory and partner review, but may come within the second half of this year. Before moving to outlook, I would like to remind all attendees to please send through your questions, if you haven't already, by pressing Submit Question on your screen. There have been encouraging signs of recovery in the second quarter, but the pandemic continues to cause considerable uncertainty. While we expect trading conditions broadly to improve over time, the recovery is likely to be uneven in pace, across geographies and sectors. As we speak, the risks and uncertainties are most acute in Southeast Asia, but operating conditions remain heavily influenced by the pandemic and the measures taken to control it in all parts of our business. The second half will also see significantly tougher comparables for growth against the prior year, both reflecting external factors such as the progress of efforts to control the pandemic, for example, in the Chinese mainland and a significantly higher level of government support received in the second half of 2020 in a number of markets. We, therefore, expect a lower growth rate in the second half of the year, and most businesses' full year profits will continue to be still some way below 2019 levels. However, the group's underlying profits and earnings per share will benefit from the accretive effects of the group simplification announced in April. As previously announced, we plan for higher earnings per share to drive improved dividend cover and continue to expect to pay a higher dividend in 2021 than the prior year. But we will assess the extent of the potential uplift in the final dividend once we have full visibility of full year and sustainable performance. With that, I've concluded my presentation, and I'm happy to take any questions you may have. Thank you very much.

We have got a few questions already come in on the chat. So I'll take those first. A question from Jayden Vantarakis at Macquarie. Is it possible to provide an update on the Hillhouse partnership? Are there any ventures that the partnership has invested in, either existing or new? The partnership which was announced in March is still in its early stages. We're very pleased with the collaborations, the early conversations that we're having with Hillhouse. And we're already seeing the -- some of the anticipated benefits in terms of the expertise that they can bring, particularly in bringing digital enablement to established businesses. And of course, their deep expertise in a range of sectors on the Chinese mainland. And also from our side, in terms of knowledge and understanding of markets across the region. At this point, we haven't made any tangible investments. And of course, as and when we get to those, any material ones, we will continue to update you on. The next question is from George Choi in relation to our dividend policy from Citibank. Would you please remind us what Jardine's dividend policy is? Our policy is to continue to grow the dividend over time. And that's why, of course, we prioritize growth of earnings over time. As we've gone through the pandemic, we've held our dividend despite seeing significant reductions in our dividend. And as I mentioned, associated with the onetime uplift in earnings as a result of the acquisition of the minority 15% of Jardine Strategic that Jardine Matheson did not already own, we also anticipate a step-up in our dividend, which we will associate -- which we'll announce, sorry, once we've seen full year performance. We do, also as a result of the Jardine Strategic minority acquisition, expect to see improved dividend cover for the Jardine Matheson dividend going forward. So hopefully, you can understand that it won't be a sort of penny for penny increase in the dividend. We do expect to increase, but we also expect to increase our cover. A question from Simon Cheung at Goldman Sachs. How would the group address the online competition issue with Yonghui? Any sign of stabilization for Dairy Farm's various operations? So taking the first part of that question, Yonghui are, of course, very well placed with their strong presence, their very high understanding of online marketing within China to respond to the very dynamic market conditions on the mainland. And we have complete confidence in their ability to do so. In the short term, I think we'll continue to see further turbulence from that. And of course, it will be interesting to see, over time, how that sector continues to develop. The group buying processes are, of course, an interesting development that we'll continue to watch with interest. And it will also, of course, be interesting to see how the market and the Chinese authorities respond to those over time. But we feel that Yonghui are in the best possible place to respond to that, and we will continue to give them our full support. In relation to the stabilization of Dairy Farm's various operations, I think, clearly, there's a lot of noise going on in Dairy Farm's numbers at the moment. Both the change that's come from Yonghui in the first half compared to the prior year and in its own subsidiary operations, there are a lot of moving parts in there. Grocery retail had been impacted by a strong buying as the world went into the COVID crisis in the same period last year, and that is not repeated in the first half of this year. However, there's been a tremendous amount of work as part of the Dairy Farm ongoing transformation that's seen a significant contribution to offsetting those downside impacts from improving profitability and a good underlying operational performance in some of the businesses. Dairy Farm continues, of course, to be impacted in its health and beauty business by the closure of the Chinese mainland. And those are factors that the team again will struggle to influence and just has to sit and watch and wait until that border reopening happens. We do expect, as we go into the second half of the year, that the noise will continue. Dairy Farm received government subsidies in the first half of 2020 that have not repeated in the first half of 2021 to nearly the same degree. And that effect will be even larger in the second half of the year as larger subsidies were received and support measures were received in the second half of last year. And again, we don't expect those to repeat in the second half of this year. Amidst all the noise, the tremendous progress that the team has made in building the yuu program here in Hong Kong, in reshaping and strengthening our businesses in Southeast Asia. The continuing steps that they're taking to address problem areas and difficult challenges as seen in the Indonesia refocusing gives us great confidence that as we get through sort of quarter-to-quarter and half-to-half noise levels and we move beyond the pandemic, the strong underlying work that they're taking in their transformation program will come through in the numbers and will be shown to be delivering a significantly stronger business than we've seen in the past. On M&A, any priority geographically and by industries? Our priorities geographically, I think, have been relatively clear and stable over time. They are, of course, exclusively focused -- almost exclusively focused within Asia. And within Asia, our key market -- priority markets are, of course, the Chinese mainland, Indonesia, Vietnam. And of course, our important presence is both in Singapore and in Hong Kong. Those are our priority markets. We, of course, have investments in other locations and we, of course, keep an interest and look for opportunities in other markets, but the majority of our investments and the majority of our focus on growth opportunities is in those priority markets of China, Indonesia and Vietnam. In terms of by industries, all of our businesses' existing positions across our portfolio are important to us and continue to be so. But we also look at adjacencies around those. And we also keep an eye on opportunities even in other areas. So at this point, nothing particular to say there. There was a question from Simon around Hillhouse, which I've already touched on in a previous question. So perhaps I'll move on. A question from Cusson Leung at JPMorgan. When I talked about the priority being to bring down corporate gearing, what's the comfortable level? Historically, Jardines has been in the single-digit gearing levels at group level. And we continue to see somewhere nearer to that as our expectation for the future. Of course, depending exactly where you are on the investment cycle, as we saw with the Jardine Strategic acquisition, you can go upwards from that. But when we go upwards, we expect to come down closer to those historic forms. We also, of course, keep an eye on parent company debt levels, and those are important to us in terms of the flexibility that we have to invest in other businesses or deepen our investments within the portfolio. And so as I mentioned, in the first half of the year since we've announced and where we are right now, we're not entertaining large inorganic investments, either externally or through buybacks. But as we get past important moments like receipt of cash proceeds from the Zhongsheng transaction and therefore, see a significant improvement in liquidity at the parent company level, we may start to look at investments, again, whilst maintaining our focus on, over time, bringing down group gearing levels closer to those single-digit historic norms. Questions in from Shaun Tan at Crédit Suisse. With the strategic partnership with Hillhouse, could you share hypothetical scenarios of the partnership between Jardine companies and Hillhouse? How should we think about capital expenditures around this front? There are 2 components to the collaboration. The smaller, if you like, more mechanical, is our commitment to invest up to $500 million over the 6-year life of the fund. And that is part of our thinking. Of course, in terms of net impact of that, that will depend upon not only how we invest, but how we start to see returns from some of those investments. And of course, Hillhouse's reputation speaks for itself in that respect. So I can't give any really concrete guidance in relation to that other than I would be very surprised if we went out as far as a net position of $500 million over the 6-year life of the fund. The second is that in terms of -- the second component is looking for opportunities to collaborate together, and that can come in a variety of ways. It can be either businesses that sit within the Hillhouse portfolio that we see an interest in. It could be new opportunities that we both look at together. There are a variety of permutations there. At this point, there's nothing concrete to announce. And in terms of gain of CapEx implications for that -- from that, they'll really be driven on a very sort of case-by-case basis. We haven't set a fixed budget for it, nor indeed have we said we're going to do that at the expense of looking ourselves and continuing our own opportunities, both within our businesses and at corporate level, to look at things on a stand-alone basis. I think I'm running a little bit short on questions now. How are we doing for time? We're running short now? I think if that's the case, I will probably give one more moment just in case there's a late addition to the questions come in. And with nothing coming through, I'll say thank you to everyone for their time and look forward to seeing you at the next update.