CARLSBG (2836) : Carlsberg Brewery (M) - Back to a dividend yield stock
Target RM11.60 (Stock Rating: HOLD)
9MFY14 core net profit was above our and consensus full-year estimates (78% of our full-year forecast). YTD revenue rose by 3.8% due to a better performance in Singapore, while net profit jumped due to the better average selling prices, product mix and operating efficiency in Malaysia, the recovery from the stock rationalisation exercise in Singapore and stronger profits from associates. We increase our FY14-16 earnings forecasts slightly and our DDM-based target price as we roll our valuation one year forward. Given the higher target price, we upgrade from Reduce to Hold. CAB declared a single-tier dividend of 5 sen per share, in line with our forecast. We prefer QL Resources which offers much stronger earnings growth.
Strong results from Singapore
Carlsberg Brewery’s (CAB) 9MFY14 revenue increased by 3.8% yoy while net profit increased by 23.9% yoy. Given that Malaysia’s sales declined by 0.9% yoy, the stronger topline was attributed to the stronger sales in Singapore (+21.6% yoy). Singapore’s sales gained traction following the completion of the stock rationalisation programme which started in 2Q13 and ended in Jan 14. There was also a positive impact from the acquisition of Maybev in Apr 2014. Despite the weaker revenue from Malaysia which made up 78% of total revenue and the higher duty paid due to the change in valuation method, net profit still grew by 23.9%. This was due to the ongoing cost management, improved prices and product mix in Malaysia (operating profit margin: +2.1% pts yoy), the low base effect from Singapore as it was impacted by the stock rationalisation exercise in the previous year as well as the acquisition of Maybev this year. The stronger net profit was also driven by stronger profit (+82% yoy to RM7.8m) from its Sri Lankan associate as the company no longer imports beers after expanding its capacity. The overall EBIT margin was up by 2.3% pts yoy to 15.9%.
Qoq results were also better
On a qoq basis, the topline jumped by 15%, driven by the strong sales from the pre-budget stocking up due to the difference in timing of the budget announcement as well as the stronger sales from Singapore, partially due to a full-quarter sales contribution from the acquisition of Maybev. This, coupled with the better margin from both countries due to higher economies of scale and cost cutting, led to net profit growing by 40.6%.
Source: CIMB Daybreak - 01 December 2014
Target RM11.60 (Stock Rating: HOLD)
9MFY14 core net profit was above our and consensus full-year estimates (78% of our full-year forecast). YTD revenue rose by 3.8% due to a better performance in Singapore, while net profit jumped due to the better average selling prices, product mix and operating efficiency in Malaysia, the recovery from the stock rationalisation exercise in Singapore and stronger profits from associates. We increase our FY14-16 earnings forecasts slightly and our DDM-based target price as we roll our valuation one year forward. Given the higher target price, we upgrade from Reduce to Hold. CAB declared a single-tier dividend of 5 sen per share, in line with our forecast. We prefer QL Resources which offers much stronger earnings growth.
Strong results from Singapore
Carlsberg Brewery’s (CAB) 9MFY14 revenue increased by 3.8% yoy while net profit increased by 23.9% yoy. Given that Malaysia’s sales declined by 0.9% yoy, the stronger topline was attributed to the stronger sales in Singapore (+21.6% yoy). Singapore’s sales gained traction following the completion of the stock rationalisation programme which started in 2Q13 and ended in Jan 14. There was also a positive impact from the acquisition of Maybev in Apr 2014. Despite the weaker revenue from Malaysia which made up 78% of total revenue and the higher duty paid due to the change in valuation method, net profit still grew by 23.9%. This was due to the ongoing cost management, improved prices and product mix in Malaysia (operating profit margin: +2.1% pts yoy), the low base effect from Singapore as it was impacted by the stock rationalisation exercise in the previous year as well as the acquisition of Maybev this year. The stronger net profit was also driven by stronger profit (+82% yoy to RM7.8m) from its Sri Lankan associate as the company no longer imports beers after expanding its capacity. The overall EBIT margin was up by 2.3% pts yoy to 15.9%.
Qoq results were also better
On a qoq basis, the topline jumped by 15%, driven by the strong sales from the pre-budget stocking up due to the difference in timing of the budget announcement as well as the stronger sales from Singapore, partially due to a full-quarter sales contribution from the acquisition of Maybev. This, coupled with the better margin from both countries due to higher economies of scale and cost cutting, led to net profit growing by 40.6%.
Source: CIMB Daybreak - 01 December 2014
