Period 3Q12/9M12
Actual vs. Expectations
The 9M12 net profit (NP) of RM35.0m was
slightly above the street’s estimate and our forecast of RM44.0m, making up
79.5% of both numbers.
Dividends An
interim single-tier 6 sen dividend has been declared during the quarter, which
was on the dot with our estimate, translating into a dividend yield of 3.2%.
Key Result Highlights QoQ, the 3Q12 revenue decreased marginally by
2.7% due to a 3.8% decrease in the operation of café chain (”OCC”) due to the
fasting month during the quarter. In line with the revenue trend, the PBT was
down by 8.7% QoQ due mainly to the decline in OCC by 12.5% although the impact was
cushioned by the 1.4% increase in the PBT of the manufacturing of beverage (MB)
segment.
YoY, the 3Q12 revenue
improved 13.8% on the back of better sales from OCC (+6.3%) and MB (+26.4%). Meanwhile,
the PBT and NP were 20.0% and 26.9% higher on the back of better sales from
both segments as well as a higher PBT margin contribution (+2.1ppt to 16.8%)
from OCC that offset the lower margin (-3.8ppt to 19.7) in MB.
YTD, the revenue and
PBT YoY jumped by 21.6% and 26.1% respectively attributed to the better OCC and
MB sales (+19.8% and +24.4%, respectively) as well as the acquisition of new subsidiaries in May
2011. Based on the proforma numbers given by the company, which reflected the
full year contribution of the new subsidiaries
in both 9M11 and 9M12, we estimate that the revenue and PBT of the group
without the new acquisitions contribution still rose by a healthy 13.5% and
12.6% YoY respectively.
Outlook We
remain positive on the company given 1) the strong growth of its fast-moving
consumer goods (FMCG) segment, which is expected to be boosted by its growing regional
market share, including that of the untapped markets in China, South Korea and
Vietnam; and 2) its vision of opening more outlets in Malaysia, Singapore, Indonesia
and China. As of Sept 2012, the company has 210 café outlets (vs. 196 in Dec
2011), of which 191 are located in Malaysia, 9 in Singapore, 7 in Indonesia and
3 in China. We believe the company is still targeting to open another 12 new
stores in 4Q12 to capture the upcoming festive season sales.
Change to Forecasts We are revising FY12-13E net profits higher by
6.4% and 7.3% to RM46.7m-RM55.5 from RM43.9m-RM51.7m previously as we imputed
in a higher other operating income for the group as reported in the latest
results.
Rating Maintain
OUTPERFORM
Valuation Inline
with earnings estimate, we have revised Oldtown’s TP higher to RM2.40 (from
RM2.26 previously), based on an unchanged PER of 14.5x over its FY13 EPS. The
new PER represents a +1.5SD above the average PER since its listing. However,
should the underlying weak market sentiment to continue, we may relook at our
Target PER and Target Price despite its
resiliency.
Risks The
global economic uncertainty may impact consumer spending, which will
consequently affect the company’s earnings prospects.
Source: Kenanga
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