Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD
Research House: MAYBANK
Guinness Anchor Bhd (GAB)
(May 10, RM7)
Maintain hold at RM6.91 with unchanged target price of RM7: Appropriately led by its Tiger brand, GAB continued to gain market share in the malt liquor market (MLM) in 3QFY10. The seasonality factor also translated into a strong net profit growth of 43% year-on-year (y-o-y) to RM47 million.
There are no changes to our forecasts as we expect a slower sequential quarter after the seasonality factor wears off. Maintain hold.
As expected, 3QFY10 turned out to be solid quarter. GAB's RM47 million 3QFY10 net profit (+43% y-o-y; +6% quarter-on-quarter) was within our and market expectations, making up 31% of our and consensus forecasts. The brewer's strong 3Q performance is not comparable y-o-y due to the earlier timing of Chinese New Year (CNY) in 2009, which resulted in some of the CNY festive sales captured in 2QFY09 instead of 3QFY09.
GAB's 12-month cumulative moving average (MA) turnover and pre-tax profit up to 3QFY10 reached new highs of RM1.33 billion (+5% y-o-y) and RM195 million (+9% y-o-y) respectively.
These are better indications of the continuing strong momentum GAB has built up, which suggests that it is likely to improve on its performance to date with the upcoming World Cup football tournament beginning June 11. We expect GAB's products - lager and stout - to continue gaining market share in the next 6-12 months.
With 39 sen per share net cash at end-3QFY10 and forecast to grow to 72 sen per share by end-FY12, we continue to like GAB for its deep dividend potential. GAB also offers steady growth potential with its ability to grow market share, whilst competing in an industry that has a high defensive quality of earnings.
We maintain our hold call and RM7 discounted cash flow-based (DCF) target price, which translates into a near 7% net dividend yield. - Maybank IB, May 10
This article appeared in The Edge Financial Daily, May 11, 2010.
Company Name: GUINNESS ANCHOR BHD
Research House: MAYBANK
Guinness Anchor Bhd (GAB)
(May 10, RM7)
Maintain hold at RM6.91 with unchanged target price of RM7: Appropriately led by its Tiger brand, GAB continued to gain market share in the malt liquor market (MLM) in 3QFY10. The seasonality factor also translated into a strong net profit growth of 43% year-on-year (y-o-y) to RM47 million.
There are no changes to our forecasts as we expect a slower sequential quarter after the seasonality factor wears off. Maintain hold.
As expected, 3QFY10 turned out to be solid quarter. GAB's RM47 million 3QFY10 net profit (+43% y-o-y; +6% quarter-on-quarter) was within our and market expectations, making up 31% of our and consensus forecasts. The brewer's strong 3Q performance is not comparable y-o-y due to the earlier timing of Chinese New Year (CNY) in 2009, which resulted in some of the CNY festive sales captured in 2QFY09 instead of 3QFY09.
GAB's 12-month cumulative moving average (MA) turnover and pre-tax profit up to 3QFY10 reached new highs of RM1.33 billion (+5% y-o-y) and RM195 million (+9% y-o-y) respectively.
These are better indications of the continuing strong momentum GAB has built up, which suggests that it is likely to improve on its performance to date with the upcoming World Cup football tournament beginning June 11. We expect GAB's products - lager and stout - to continue gaining market share in the next 6-12 months.
With 39 sen per share net cash at end-3QFY10 and forecast to grow to 72 sen per share by end-FY12, we continue to like GAB for its deep dividend potential. GAB also offers steady growth potential with its ability to grow market share, whilst competing in an industry that has a high defensive quality of earnings.
We maintain our hold call and RM7 discounted cash flow-based (DCF) target price, which translates into a near 7% net dividend yield. - Maybank IB, May 10
This article appeared in The Edge Financial Daily, May 11, 2010.
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