Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD
Research House: INTER PACIFIC
Guinness Anchor Bhd
(June 17, RM7.61)
Maintain neutral at RM7.63 with higher target price of RM7.90 (from RM7.20): Guinness Anchor Bhd (GAB) recorded higher net profit in the past two World Cup seasons. Being supported by its strong portfolio brands like Tiger, Guinness, Heineken, Anchor and super-premium Kilkenny coupled with its strong advertising and promotional activities via the RM10 million nationwide promotional programme that was carried out, we believe GAB is well-positioned to sustain their market position. Room to further alleviate their market share remains high as they continue to invest in brand building. Accordingly, our earnings forecast for FY10-FY11 has been revised upwards by 5%-8% and our target price raised to RM7.90 (previously RM7.20) based on our discount dividend model with weighted average cost of capital at 9.1%. We reiterate neutral.
GAB expects sales to increase between 10% and 15% during the ongoing FIFA World Cup 2010 season. This was based on the RM10 million nationwide promotional programme carried out by GAB. Positive contribution from 2010 World Cup is viewed as the 'icing on the cake' from its already good financial year ending June 30, 2010. GAB's optimism was reflected by its bottling line which has been operating at full capacity to cater for the increase demand, with production volume up 15% to ensure no shortages during the 2010 World Cup. GAB reported that sales have been overwhelming since the kick-off of 2010 World Cup, especially during the opening match in Penang and Klang Valley. ' Inter-Pacific Research, June 17
This article appeared in The Edge Financial Daily, June 18, 2010.
Company Name: GUINNESS ANCHOR BHD
Research House: INTER PACIFIC
Guinness Anchor Bhd
(June 17, RM7.61)
Maintain neutral at RM7.63 with higher target price of RM7.90 (from RM7.20): Guinness Anchor Bhd (GAB) recorded higher net profit in the past two World Cup seasons. Being supported by its strong portfolio brands like Tiger, Guinness, Heineken, Anchor and super-premium Kilkenny coupled with its strong advertising and promotional activities via the RM10 million nationwide promotional programme that was carried out, we believe GAB is well-positioned to sustain their market position. Room to further alleviate their market share remains high as they continue to invest in brand building. Accordingly, our earnings forecast for FY10-FY11 has been revised upwards by 5%-8% and our target price raised to RM7.90 (previously RM7.20) based on our discount dividend model with weighted average cost of capital at 9.1%. We reiterate neutral.
GAB expects sales to increase between 10% and 15% during the ongoing FIFA World Cup 2010 season. This was based on the RM10 million nationwide promotional programme carried out by GAB. Positive contribution from 2010 World Cup is viewed as the 'icing on the cake' from its already good financial year ending June 30, 2010. GAB's optimism was reflected by its bottling line which has been operating at full capacity to cater for the increase demand, with production volume up 15% to ensure no shortages during the 2010 World Cup. GAB reported that sales have been overwhelming since the kick-off of 2010 World Cup, especially during the opening match in Penang and Klang Valley. ' Inter-Pacific Research, June 17
This article appeared in The Edge Financial Daily, June 18, 2010.
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