Period 2Q13 / 1H13
Actual vs. Expectations
Guinness Anchor’s (“GAB”) 1H13 net
profit of RM123m came in within ours and the street’s estimates, making up
56.5% and 54.8% of ours and the street’s FY13 full-year estimates of RM217.5m and
RM224.6m respectively.
Dividends A
single tier interim dividend of 20 sen was declared as expected.
Key Results Highlights
QoQ, the net profit of RM66.2m improved by
16.4% due to the better sales number (+9.5%) of RM429.4m. The improved sales
were mainly due to the additional 9 days business freeze then for the implementation
of its new IT system (Project Quantum) back in 1Q13, where the sales were only registered
in the current quarter.
YoY, GAB’s 1H13 net
profit improved marginally by 1.6% from RM121.0m to RM123.0m despite the 10%
drop on its revenue to RM821.7m. The slower sales in 1H13 were mainly due to
the overall market softness. To recap, its 3M13 sales were much slower compared
to the previous year due to the absence of stock-up activities prior to the
Budget announcement. However, GAB still managed to increase its net profit
marginally by 1.6% to RM123.0m, underpinned by a pre-tax margin improvement of
2.3ppt from 17.7% to 20.0% due to its improved product pricings in the malt
liquor market and favourable product/channel mix. Management guided that the
better sales of its bottled products as compared to its canned products had
also contributed to the margin expansion.
Outlook Moving forward, we believe that GAB will be
able to deliver a good set of earnings in the next quarter (3Q13) as GAB has
recorded strong sales in January due to the Chinese New Year celebration.
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 FY13 earnings.
Risks Higher than expected excise duty hike, input
cost and a decline in its market share.
Source: Kenanga
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