Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD
Research House: MAYBANK
Carlsberg Brewery Malaysia Bhd
(May 12, RM7.40)
Maintain buy at RM7.23 with higher target price of RM8 (from RM7.20): Carlsberg's results came in above expectations. Net profit in 1Q11 of RM48.9 million (+29.3% year-on-year; +60.5% quarter-on-quarter) was 36.8% of our full-year forecast, on stronger margins and a seasonally strong 1Q.
We lift our 2011/12 forecasts by 4% to 15% on improved margin assumptions. Our discounted cash flow target price is correspondingly raised to RM8 (+11%). We do not rule out Carlsberg paying another special dividend this year akin to 2010's, which would be a positive.
While 1Q sales are typically higher due to Chinese New Year festivities, Carlsberg's 1Q11 sales were particularly strong, due in part to a more successful CNY sales campaign this year, which resulted in a 7.6% y-o-y increase in revenue. Geographically, domestic sales rose 7.1% y-o-y and by a higher 8.8% y-o-y for Singapore.
The strong sales filtered through to better-than-expected earnings before interest, tax, depreciation and amortisation (Ebitda) margin, which expanded to 16.6% in 1Q11 from 14% in 1Q10.
We reckon the improvement in margins was also driven by operational efficiencies and savings, reflective of industry trends. Overall net profit jumped 29% y-o-y and was above our expectations.
We have raised our net profit forecasts by 4% to 15% mainly on higher earnings before interest and tax (Ebit) assumptions (2011: +2 percentage points; 2012: +1pps), but offset by higher tax rates (2011: +3pps; 2012: +4pps to 24% each). Following this, we expect Carlsberg to deliver a two-year net profit compound annual growth rate of 5.7%.
We maintain our 'buy' call with a revised target price of RM8 following the revision of our forecasts and on rolling forward our valuations. Valuations are still decent, in our view, with the stock trading at the low end of -1 standard deviation from its 10-year mean.
We forecast a 26 sen dividend per share for 2011, which implies a conservative 52% payout ratio (two-year historical payout: 69% to 100%). We do not rule out a special dividend payout this FY, given its net cash of RM44 million as at March 2011. ' Maybank IB Research, May 12
This article appeared in The Edge Financial Daily, May 13, 2011.
Company Name: CARLSBERG BREWERY MALAYSIA BHD
Research House: MAYBANK
Carlsberg Brewery Malaysia Bhd
(May 12, RM7.40)
Maintain buy at RM7.23 with higher target price of RM8 (from RM7.20): Carlsberg's results came in above expectations. Net profit in 1Q11 of RM48.9 million (+29.3% year-on-year; +60.5% quarter-on-quarter) was 36.8% of our full-year forecast, on stronger margins and a seasonally strong 1Q.
We lift our 2011/12 forecasts by 4% to 15% on improved margin assumptions. Our discounted cash flow target price is correspondingly raised to RM8 (+11%). We do not rule out Carlsberg paying another special dividend this year akin to 2010's, which would be a positive.
While 1Q sales are typically higher due to Chinese New Year festivities, Carlsberg's 1Q11 sales were particularly strong, due in part to a more successful CNY sales campaign this year, which resulted in a 7.6% y-o-y increase in revenue. Geographically, domestic sales rose 7.1% y-o-y and by a higher 8.8% y-o-y for Singapore.
The strong sales filtered through to better-than-expected earnings before interest, tax, depreciation and amortisation (Ebitda) margin, which expanded to 16.6% in 1Q11 from 14% in 1Q10.
We reckon the improvement in margins was also driven by operational efficiencies and savings, reflective of industry trends. Overall net profit jumped 29% y-o-y and was above our expectations.
We have raised our net profit forecasts by 4% to 15% mainly on higher earnings before interest and tax (Ebit) assumptions (2011: +2 percentage points; 2012: +1pps), but offset by higher tax rates (2011: +3pps; 2012: +4pps to 24% each). Following this, we expect Carlsberg to deliver a two-year net profit compound annual growth rate of 5.7%.
We maintain our 'buy' call with a revised target price of RM8 following the revision of our forecasts and on rolling forward our valuations. Valuations are still decent, in our view, with the stock trading at the low end of -1 standard deviation from its 10-year mean.
We forecast a 26 sen dividend per share for 2011, which implies a conservative 52% payout ratio (two-year historical payout: 69% to 100%). We do not rule out a special dividend payout this FY, given its net cash of RM44 million as at March 2011. ' Maybank IB Research, May 12
This article appeared in The Edge Financial Daily, May 13, 2011.
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