Cautious Ahead!

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: TA

Price Call: SELL

Target Price: 11.89

Strong Finish for FY14

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: TA

Price Call: SELL

Target Price: 11.42

Carlsberg gets 'outperform' call

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: KENANGA

Price Call: BUY

Target Price: 14.10

Kenanga Research initiated coverage of Carlsberg Brewery Malaysia Berhad with an "outperform" call, given the brewer's strength in the niche beer market.

The brewer has the second-biggest market share in Malaysia, at 40 percent. The firm's niche products will help the company expand market share by 1.5 percent by June, Kenanga said in a note on Thursday.

"Carlsberg is the leader in the super premium segment, albeit the segment is still relatively new and small," Kenanga said.

"We believe that Carlsberg will be better positioned to compete with Guninness Anchor Berhad with its new locally brewed Asahi and the fast-growing Kronenbourg."

Kenanga set a target price of RM14.10 per share.

At 9.38 am, Carlsberg shares were down 0.46 percent at RM13.02, while the benchmark composite index was up 0.22 percent at 1,676.95. -- Reuters

Carlsberg jumps after RHB raises fair value

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: RHB

Price Call: BUY

Target Price: 11.60

As of the 12:30pm trading break in Kuala Lumpur, Carlsberg Brewery Malaysia Bhd added 0.7 per cent to RM10.90, poised to close at a record.

The stock's so-called fair value was raised to RM11.60 from RM10.90 at RHB Capital Bhd to reflect higher earnings prospects over the next three years, the brokerage said in a report today. -- Bloomberg

AmResearch ups Carlsberg fair value

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: AMMB

Price Call: BUY

Target Price: 11.50

AmResarch revises its fair value on Carlsberg Brewery Malaysia up to RM11.50 per share from RM10.40, citing brighter long term growth prospects from the brewery's transformation strategy.

"Despite the stock's relative outperformance year to-date, we believe the current share price has not fully reflected Carlsberg's full potential," the broker said in a research note on Friday.

Maintaining "buy" on the counter, AmResearch said it foresees long-term transformational earnings growth underpinned by the group's aspiration to become a regional manufacturing hub with a strong focus on imported labels.

As of 9.35am in Kuala Lumpur trading, Carlsberg Brewery rose 0.59 percent, outperforming the Malaysian benchmark index, up 0.22 percent. -- Reuters

Carlsberg Brewery (M) - Cheers to Kronenbourg

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: CIMB

Price Call: BUY

Target Price: 11.00

Target RM11.00

Carlsberg's briefing revealed its plans for in-house brewing of Kronenbourg and Blanc 1664 by 1H12, which should be positive for margins. Another plus is management's expectations of less raw material price pressure.

Source: CIMB Daybreak February 28, 2012, PDF Report

Carlsberg Brewery - Charging forward with premium beers BUY

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: AMMB

Price Call: BUY

Target Price: 10.40

' Carlsberg Brewery (Carlsberg) brewed a fine set of FY11 resultswith a higher net profit of RM166mil. Earnings met our expectation but came in6% ahead of consensus.

' Top line growth for FY11 was a solid 9% YoY, owing  to higher revenues from both Malaysia (YoY:+8%) and Singapore (YoY: +12%), with increased beer consumption largely drivenby a better sales mix and successful brand building activities. 

' But bottomline was up 24% owing to a 1.9ppt-EBITDA margingain from productivity improvement and cost efficiency initiatives, which morethan offset investments in new packaging design and new large bottlesundertaken as part of Carlsberg's global re-branding exercise. Earningscontinue to be predominantly Malaysia-driven, with local ops making up 65% ofgroup EBIT.  

' On a sequential basis, turnover and net profit fell by 17%and 24%, respectively. While a softer beer volume in 4Q was attributed mainlyto some post-Budget de-stocking activities, net profit was dragged down byone-off restructuring expenses and write-down of inventories for slow movingstock in Taiwan. 

' Management declared total dividends of 67.5 sen/share comprisinga final & special dividend of 65.5 sen less tax and a special tax-exempt of2 sen. Total dividends of 72.5 sen/share for FY11 translate into a generousyield of 6%-7% based on the current share price. 

' No change to our recently revised FY12F-13F earnings forecasts.We now introduce a net profit of RM206mil for FY14F (YoY: 6%). 

' We maintain our MLM growth forecast at 5%-6% for 2012-13.We believe the industry is poised to extend its upward trend, buoyed by robustbeer volumes on the back of UEFA European Football Championship special world event,and stable margins from steady raw ingredients. We anticipate intensifiedA&P by Carlsberg, which is the official sponsor of the football event,especially in the 4-6 weeks leading to match playoffs.

' We re-iterate BUY on Carlsberg with an unchanged DCFbasedfair value of RM10.40/share. We remain upbeat about the group's earningsprospects on the back of an expanding market share and deepening marketpenetration as driven by a strengthening product portfolio of premium beers.Net dividend yields of 5%-6% as premised on a conservative payout of 70% per annum are also attractive.

Source: AmeSecurities

Carlsberg Brewery (M): Upgrade to Buy - Upgrade to Buy on a dividend high

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 10.20

Raising TP. Carlsberg achieved a commendable full-year 2011 core net profit of RM154.1m (+15.7% YoY). Results were in line with our forecast but below (-7.3%) consensus. Its Singapore subsidiary was the key earnings contributor on improved margins. 2011 dividend payout has risen to above 100% and we raise our 2012-13 assumption to 98%. We upgrade Carlsberg to a Buy, with a raised DCF-based TP of RM10.20, on the positive developments at its foreign operations.

Maybank Research 27 Feb 2012

Click here for full report

Carlsberg Brewery (M) - A post-CNY red packet

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: CIMB

Price Call: BUY

Target Price: 11.00

Target RM11.00

Apart from a 7% FY11 earnings outperformance, Carlsberg surprised with a special dividend for the third year running. This should enable the stock to Outperform as investors may come to the view that special dividends are becoming more of an annual affair.





Source: CIMB Daybreak February 27, 2012,  FULL PDF Report

Carlsberg Brewery (Hold): Brewing Asahi locally

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: MAYBANK

Price Call: HOLD

Target Price: 8.30

Maintain Hold and our DCF-based TP of RM8.30. We are positive on the move to brew Asahi locally, for this should contribute to some margin enhancement over the medium term. In the near term, however, no material impact is expected given that the super premium segment is not a meaningful contributor to overall sales just yet. No dividend policy has been established hence we maintain our net dividend payout assumption of 58-62% for FY12-13 - a net yield of 3.8% for FY12.


Maybank Research 30 January 2012

Click here for full report

M'sian brewed Asahi Super Dry coming to town soon BUY

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: AMMB

Price Call: BUY

Target Price: 8.30

That calls for a Carlsberg cheer

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: AMMB

Price Call: BUY

Target Price: 8.30

Carlsberg Brewery (M) Bhd
(Nov 16, RM7.26)
Maintain buy at RM7.09 with fair value of RM8.30: Carlsberg Brewery brewed a sequentially higher net profit of RM49 million for 3QFY11. Results for 9MFY11 came in well within both our, and market expectations, at 84% and 85% of full-year estimates.

The group recorded a solid top line growth of 16% quarter-on-quarter (q-o-q), in line with the strong malt liquor market (MLM) consumption trend seen in industry player Guinness Anchor Bhd.

This was led mainly by: (i) seasonal pre-budget speculative trade loading activities in Malaysia; (ii) higher revenue from increased beer sales volume from 100%-owned Carlsberg Singapore which grew 7% quarter-on-quarter (q-o-q) and; (iii) higher contribution of RM2 million from associate Lion Brewery Ceylon plc.

Despite a higher effective tax rate (five percentage points [pps] q-o-q), 3QFY11 net profit surged 58% compared with the preceding quarter. Earnings before interest, tax, depreciation and amortisation (Ebitda) margin was up'' five pps q-o-q, largely attributed to: (i) better margins from Carlsberg Singapore at 25% against 13% (2QFY11) and (ii) productivity gains from initiatives undertaken within Carlsberg's supply chain, as well as cost efficiencies from improved sales and marketing. Recall, Carlsberg invested in a new packaging design and introduced new large bottles as part of its global rebranding exercise in the preceding quarter.

Similar to past years, no dividend was declared for this quarter. Our net dividend per share forecast of 30 sen per share (yield: 4%) is premised on a dividend payout of 60%, in line with management's guidance of 50% to 70% per year. The group declared an interim dividend of five sen per share (less 25% tax) in 2Q.

Carlsberg's earnings growth will be firmly underpinned by increased demand on the back of greater advertising and promotions, namely the UEFA European Cup in 2012, of which the group is the official sponsor, as well as higher revenue contributions from its strengthening portfolio of imported/premium beers.

As it is, sales of recently launched 'Kronenbourg 1664' and 'Kronenbourg Blanc' French beers continue to gain further traction. Premium beers make up circa 10% of group revenue. Higher beer volumes would serve as a decent buffer against higher input costs in FY12F. We are not too concerned as major input costs, namely malting barley and hops, are some 24% off year-to-date peaks.

Maintain 'buy' on Carlsberg with an unchanged discounted cash flow-based fair value of RM8.30 per share. ' AmResearch, Nov 16


This article appeared in The Edge Financial Daily, November 17, 2011.

All eyes on the premium segment

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 8.00

Margin revival in consumer sector

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD

Research House: AMMB

Price Call: BUY

Target Price: 8.30

Consumer sector
We have turned more constructive on the consumer sector, in particular on selected food and beverage (F&B) companies within our consumer universe. We believe peaking inflation with softening commodity prices are strong drivers for potential earnings upside of consumer stocks from 2H11 onwards.

An absence of intensified worries over high inflation and higher disposable income should provide support to increased consumption levels. While consumption of consumer goods and services are relatively more resilient compared with other industries, easing inflationary pressures could be a further boost to top line growth of consumer companies. Our in-house economist forecasts July inflation rate to inch up further from June's 3.5% year-on-year'' (a 27-month high) due to the upward adjustments in energy tariffs, before retreating.

In addition to the confluence of structural and cyclical issues, we observe that most global commodity prices have fallen off their peaks on weak recovery in the developed world and slower growth in emerging markets. China, the world's largest importer of various commodities, recently posted a slower GDP of 9.5% for 2Q, against 9.7% in the previous quarter. Should most commodity prices see a notable slowdown towards end-2011, and as raised average selling prices (ASPs) are sustained, we see room for margin expansion on the back of lower input costs. With the exception of sugar and milk, other key input costs such as corn, wheat, cocoa and tapioca starch are trending downwards, 5% to 19% off year-to-date (YTD) peaks.

Across our coverage of consumer stocks, large caps with pricing power and market share leadership have largely outperformed the market by +6% at +27% YTD.

Smaller and medium-sized caps on the other hand were down by as much as 21% in the same period, mainly due to margin compression as a result of high raw materials prices. In this current environment, we prefer staples over discretionaries. Smaller and medium-sized F&B manufacturers are likely to see higher earnings upside potential arising from margin expansion.

Our top 'buys' are Three-A Resources Bhd (3A) and Cocoaland Holdings Bhd as gross margins for both stocks have been hard hit in the past few quarters. Margin expansion should therefore be stronger. Raw materials dominate the bulk of operating costs at 40% to 50% on average. We like 3A for its long-term earnings transformational growth as underpinned by product and capacity expansion from its China joint venture with Wilmar International. We also like Cocoaland for its aggressive but well-defined capacity expansion plans in gummies and high-growth PET 'hot-filling' technology within the beverages industry.

Potential beneficiaries of a lower cost structure include F&B giant Fraser & Neave Holdings Bhd (F&N) and KFC Holdings Bhd (KFCH) for their superior pricing power and focus in niche markets. Stabilising malting barley and hops in 2H11 ' key inputs for brewers ' may also partially offset the price surge effects seen in 1H. Depending on the magnitude, this could potentially translate into better than expected margins in 2012 for Carlsberg Brewery and Guinness Anchor Bhd. ' AmResearch, Aug 1


This article appeared in The Edge Financial Daily, August 2, 2011.

CARLSBG - Carlsberg shares up after 1Q net profit rises 29%

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD
Research House: MAYBANK

KUALA LUMPUR: CARLSBERG BREWERY MALAYSIA BHD [] shares rose on Thursday, May 12 after its net profit for the first quarter ended March 31, 2011 rose 29.3% to RM48.94 million from RM37.85 million a year ago, due mainly to higher sales during the Chinese New Year.

At 11am, Carlsberg was up 17 sen to RM7.40 with 69,800 shares traded.

Revenue for the quarter rose to RM407.22 million from RM378.46 million. Earnings per share was 16.01 sen while net assets per share was RM2.07.

Maybank IB Research maintained its buy recommendation on Carlsberg and raised its target price to RM8 from RM7.20.

'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 shares for 2011, which implies a conservative 52% payout ratio (2-year historical payout: 69%-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 said in a note May 12.

''

CARLSBG - Carlsberg's margin expansion fuels growth

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.

CARLSBG - Malt liquor sector back on upward trend

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD
Research House: AMMB

Malt liquor sector
Maintain neutral: We believe the malt liquor market (MLM) in Malaysia is back on a cyclical upward trend, with the industry forecast to grow at a decent 4% to 5% in 2011 and 2012. In contrast, average MLM growth was flattish at 0.5% to 1.5% per year over the last three years, with the exception of the estimated 4% to 5% FIFA World Cup-led growth in 2010.

The latest industry data reveals that consumption as measured in hectolitres (1HL = 100 litres) has surpassed its previous peak of 1.3HL in 2004/05 ' marking a significant industry turnaround. As we have seen, consumption has been stagnant over the years, ever since alcohol excise duty was raised from RM6 per litre to RM7.40 back in 2004.

Notwithstanding a slight moderation in consumption this year due to the absence of special world events, demand momentum should remain relatively steady moving forward, buoyed by the status quo of excise duties, more brewer-organised events and festivities, and the UEFA European Cup further out in 2012. We forecast higher advertising and promotion spending of RM160 million for Guinness Anchor Bhd (GAB) and RM245 million for Carlsberg Brewery Bhd (CAB) in 2011 (year-on-year: +2% to 3%).

Despite the upward pressure on soft commodity costs, brewers have successfully averted any significant margin erosion via forward purchases of raw ingredients of up to 10 to 12 months. Prices of malting barley, hops and wheat have surged 13% to 18% (last four months) on concerns of tight weather-related crop outputs, potentially translating into higher cost structures for brewers from 2012 onwards. Additional costs are mostly passed on to consumers through higher average selling prices (ASPs) as in the past, while annual price adjustments averaged 3% to 5%. Nevertheless, the stronger ringgit against the US dollar would bode well in providing some cushion against volatile imports. Raw ingredients and packaging materials constitute approximately 13% to 14% of revenue.

At the forefront of CAB's growth is rising earnings contribution from increased brewing capacity of Carlsberg Singapore. Carlsberg Singapore makes up 30% of group revenue at present. Industry prospects in Singapore are comparatively brighter, as it registered a faster growth rate of 8% to 9% in 2010 (twice that of Malaysia), while consumption per capita at approximately 25 litres is 19% higher than that in Malaysia.

On the other hand, GAB is expected to at least retain its 60% MLM market leadership in Malaysia. While lacking a strong premium beer to compete against CAB, the group has nevertheless grabbed overall MLM market share off CAB though its iconic Tiger beer. We expect the group to leverage on its stronghold of better margins on trade sales channels to boost consumption. Our earnings forecast model indicates a three-year compound annual growth rate of 4%.

For exposure to the MLM sector, we prefer CAB as valuations are more attractive. Unlike GAB, CAB is currently trading below the mean of its 10-year historical price-earnings ratio band. CAB's undemanding current price-to-book value of three times is near its mean, at a deep discount to GAB's seven times (equivalent to 2.5 standard deviation). For a stock offering comparable earnings per share growth and implied dividend yields, CAB's valuations are unjustifiably cheap. ' AmResearch, March 10


This article appeared in The Edge Financial Daily, March 11, 2011.

CARLSBG - Capacity expansion, new premium beer on the cards

Stock Name: CARLSBG
Company Name: CARLSBERG BREWERY MALAYSIA BHD
Research House: RHB

Carlsberg Brewery (M) Bhd
(Jan 19, RM6.40)
Maintain outperform, revise fair value to RM7.87 from RM6.60: The malt liquor market (MLM) volume in Singapore is estimated to total approximately 1.5 million hectolitres (HL), similar to the volume in Malaysia despite its much smaller size.

Carlsberg's overall market share in Singapore stood at 21% as at 9MFY10, dominated by its Carlsberg Green Label brand.

The leader in terms of market share in Singapore is Asia-Pacific Breweries (APB), which controls about 40% of the total MLM. In terms of growth, management estimates that Singapore's MLM market grew at a steady rate of 8% to 9% in 2010 and is expected to maintain a similar momentum moving forward.

The strong top line growth expectation arising from Singapore is one of the reasons Carlsberg is planning to undertake a capacity expansion in its existing production facility in Shah Alam.

We understand that currently its overall production capacity stands at 1.3 million HL per year.

Carslberg plans to spend approximately RM6 million in capital expenditure to increase its production capacity. The expansion is expected to be completed by 2QFY11, which would increase Carlsberg's overall production capacity by 0.15 million to 0.2 million HL or 11.5% to 15.4%.

Carlsberg is planning to bring a new premium beer to the market to compete with Heineken, which may result in the discontinuation of Tuborg. We understand that the new premium beer would be a lager, and that it is a brand which is already distributed in the local market, albeit under the imported segment and not necessarily already distributed by Carlsberg.

After adjusting our assumptions for: (i) a higher revenue growth rate in Singapore of 8% for FY10/12 (from 3% previously); (ii) a higher growth rate of 5% for the Malaysian MLM for FY11 (from 1%); and (iii) higher capex and dividend payout assumptions of RM42 million and 70% respectively for FY11, our FY10/12 earnings are upgraded by 3.2% to 8.4%.

The risks include: (i) sharp drop in total industry volume; (ii) continued decline in Carlsberg's market share; and (iii) an excise duty hike in the budget proposals.

We are positive on Carlsberg's outlook moving forward, underpinned by its strong growth potential in Singapore.

Furthermore, we like the stock due to its strong dividend yield of 6.1% for 2011.

We have increased our DCF-derived fair value to RM7.87 (from RM6.60 previously) based on unchanged weighted average cost of capital of 9.2%. Our fair value implies a target FY11 price-earnings ratio (PER) of 15.5 times, which we believe is fair as it is two to three times lower than Guinness' current valuations, currently trading at 19 times CY11 PER. ' RHB Research Institute, Jan 19


This article appeared in The Edge Financial Daily, January 21, 2011.