Period 1Q13 / 3M13
Actual vs. Expectations
The 3M13 net profit of RM56.8m came
in within ours and the street estimates, making up 26.1% and 25.5% of ours and
the street’s FY13 full-year estimates of RM217.5m and RM222.7m respectively.
Dividends No
dividend was declared as expected
Key Results Highlights
YoY, the 3M13 revenue of RM392.3m was down by 12%
to RM392.3m due to the absence of stock-up activities prior to the recent
Budget announcement as the distributors had anticipated that there would be no
excise duty hike in the Budget. Sales were also interrupted by a 9-day
closed-off period for the migration of its existing IT infrastructure i.e.
Project Quantum, which was launched on the 1st of Oct. Despite the lower revenue, the net
profit (RM56.8m) still rose by 3% (RM55.2m) on the back of an improved EBITDA
margin (+3.5ppt) of 21.4% due to a lower operating cost from the introduction
of Heineken new bottle labelling that uses plastic instead of paper.
QoQ, the net profit of RM56.8m improved by 63% due
to the better sales number (+13%) of RM392.3m. This was mainly due to a seasonally
stronger quarter for GAB and stronger Tiger and Guinness sales. The marketing
season strategy is normally to push for sales in the 3Q of the CY onwards with
marketing events such as Arthurs Day. Outlook
Moving forward, we believe that
Guinness will continue to deliver another strong set of earnings next quarter
(2Q13) given its extensive marketing plans in the coming months, i.e. Merry
Guinness, Heineiken music festival namely
Thirst with Avicii, Justice and Above and Beyond, Tiger
FC parties and etc.
Change to Forecasts
No changes to our forecasts at this
juncture.
Rating Maintain MARKET PERFORM
Valuation Our target price of RM17.10 is based on a DCF valuation
with a WACC of 7.5%, implying a PER of 23.8x to its FY12 earnings.
Risks Higher than expected excise duty hike, input
cost and decline in its market share.
Source: Kenanga
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