In the sentence, "his" is a pronoun. A pronoun is a word that can function by itself as a noun phrase and that refers either to the participants in the discourse (e.g., I, you ) or to someone or something mentioned elsewhere in the discourse (e.g., she, it, this ). Pronouns make it so that you don't have to keep repeating the same noun over and over again. Instead of saying "The President of the United Stats is preparing the President's State of the Union message" his replaces "the President's".
