Sturdy First-Half

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: TA

Price Call: BUY

Target Price: 15.42

Encouraging Performance, Challenging Environment

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: TA

Price Call: SELL

Target Price: 13.55

GAB - Double Whammy to Sales and Margin

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: TA

Price Call: SELL

Target Price: 15.43

GAB - Pursuing Carlsbergs Footsteps

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: TA

Price Call: SELL

Target Price: 15.43

EBIT Grew by 8.5% YTD

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: TA

Price Call: SELL

Target Price: 17.87

Maybank cuts Guinness Anchor to 'hold'

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: MACQUARIE GROUP

Price Call: HOLD

Target Price: 13.50

Maybank Research lowered its call on Malaysian Guinness Anchor Bhd to "hold" from "buy" on uncertainty on dividend payouts.

"Without further clarity on increased dividends funded by its debt instruments, we see little impetus for the share price at this stage," said the broker in a research note on Thursday.

Maybank said Guinness' management has been coy on announcing dividend payouts and only confirmed that funds would be mainly used for capital expenditure.

Maybank kept its target price for Guinness unchanged at RM13.50 per share. -- Reuters

Guinness Anchor: The party continues

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: CIMB

Price Call: BUY

Target Price: 14.00

Target RM14.00

During its semi-annual briefing, Guinness revealed its plans to raise selling prices by 3-4% at end-March to help offset raw material price pressure. This will help to preserve margins.

Source: CIMB Reasearch - 29 Feb 2012

GAB (FV RM15.27 - BUY) Company Update: More Expensive Beer Awaits

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: OSK

Price Call: BUY

Target Price: 15.27

During yesterday's analyst briefing, GAB shed some light onits brands' performance (albeit no concrete figures were given) and itsnear-term plans. GAB's premium brands saw strong  volume growth from posh bars and pubs, whilethe early CNY boosted supermarket sales in December. It has also indicated itsintentions to raise prices starting from end-March and its tolerance for higherdebt levels. We raise our FY12-FY13 earnings forecast by 2.7-1.3% on higher volumeand price expectations. Maintain BUY at FV RM15.27.

Premium brands shine.GAB's 1HFY12 revenue grew by 15.8% y-o-y, largely driven by  the following two factors:  (i) strong Guinnessand Heineken performance, with Heineken's volume growing by double digits, and(ii) the earlier-than-usual Chinese New Year for 2012. The modern on-tradesegment (posh bars and pubs) drove Guinness and Heineken's volume growth,  with GAB claiming that at least 80% of newbars and contract renewals across the country choose GAB as their beersupplier.

CNY effect comesearly. The earlier Chinese New Year, meanwhile, boosted the offtradesegment (supermarkets) as consumers stocked up to entertain guests at home duringthe festive season. Retailers and dealers have procured their supplies from GABin Dec 2011 in anticipation of robust consumer patronage in early January.Hence, it is not fair to make comparisons between 1HFY12 and 1HFY11, as1HFY12's volume was skewed by the earlier-festive-season factor.

Asahi not seen as amajor threat. Given Carlsberg's aggressive introduction of various brandsto target the premium beer segment, there will naturally be questions on GAB's strategyof maintaining its market share in this segment. Aside from highlighting Malaysiandrinkers' brand loyalty, the company also mentioned Asahi's weak presence outsideof Japan (Asahi is the beer Carlsberg has chosen to invest in to compete with Heineken). While emphasizing that the company will continueto be prudent and not take competition lightly, GAB highlighted Carlsberg'sunsuccessful attempts in the past to introduce new brands,  including Tuborg (to compete  with Heineken) and Skol (to contend withAnchor).

Price increase andpotentially more borrowing. GAB will increase its prices at endMarch at arate of 3-4% following escalating raw material costs. We also gathered that whileGAB is comfortable with its current D/E ratio of 0.3x, it  is receptive to a  slightly higher ratio, thus implying that itwill potentially take on more borrowings (and/or dish out more dividends).Capital expenditure for FY12 stands at around RM75m, which is higher than theusual RM30m-50m per year due to a brewery infrastructure investment project.

Source: OSK188

Guinness Anchor: Upgrade to Buy - A tribute to froth and body

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 13.50

Results in line, upgrade to Buy, raising TP. 1HFY12 net profit of RM121m (+17% YoY) was boosted by sales growth on stable margins. We note Guinness' growing cash pile and would not rule out larger dividends, which could be boosted by its recent debt issuance. Improving market penetration and decent yields (net: 4.9%) coupled with possible further cash management initiatives provide upside impetus to the stock price. We raise our DCF-based TP to RM13.50.

Maybank Research - 24 Feb 2012

Click here for full report

CNY effect is not small beer

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: CIMB

Price Call: BUY

Target Price: 14.00

Target RM14.00

Guinness's 1HFY6/12 results were strong, thanks to pre-CNY loading which led to record volumes in December. Margins were also higher as a result of higher volume growth for the Guinness and Heineken
premium beers than the mainstream Tiger.


Source: CIMB Research 24 February 2012

A Dragon Boost

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: OSK

Price Call: BUY

Target Price: 14.20

Guinness Anchor - Glass half full at half time HOLD

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: AMMB

Price Call: HOLD

Target Price: 13.55

' Guinness Anchor Bhd (Guinness) posted a higher net profitof RM68mil for 2Q, bringing the total to RM121mil for 1H. Annualised, interimnet profit is 28% above our forecast and 24% above consensus. We deem theresults at half time to be a tad above expectations, given  an anticipated strong 2HFY12F on the back ofthe UEFA European Football Championship special world event from 8 June -1July.

' Consequently, our FY12F-14F earnings forecasts havebeentweaked upwards by 3%-8%. We now project net profit to grow 13% YoY to RM205milfor FY12F. 

' Our earnings model takes into account a marginal margin compression due to  higher costs of raw materials, packaging anddistribution, which are due to kick-in over the next few quarters. As anindication, packaging costs and price of malting barley for CY12 are circa30%-40% higher YoY.  

' Guiness's turnover and net profit for 1HFY12 surged 16% and17% on a YoY basis. This was attributed mainly to:- 1) Increased beer volumesamid successful events (Tiger Street Football, Arthur's Day and HeinekenThirst), and 2) Enhancement of the route-to-market strategy.

' Guinness Stout remains as the star performer, while Heinekencontinues to chalk up a double-digit growth.  Tiger, the group's main earnings driver, isestimated to have maintained market leadership within the mainstream maltliquor segment.

' On a sequential basis, 2Q turnover and net profit was up 5%and 19%, respectively. Apart from this quarter being heavily seasonal due toChristmas and the New Year celebrations, bottom line growth was boosted by a2.3ppts improvement in EBITDA margin from lower costs of goods sold. 

' Management declared a single-tier interim dividend of 10 sen/sharefor this quarter, similar to previous years. Including a special interimdividend of 60 sen/share declared in December 2011, dividends total 70sen/share for 1HFY12. No change to our dividend forecast of 117sen/share forFY12F. 

' No change to our HOLD recommendation on Guinness with aDCF-based fair value of RM13.55/share (WACC:8.9%).  At the current share price, the stock stilloffers a decent 5% dividend yield, premised on an established dividend payoutof 90% per annum.   

Source: Amesecurities

GAB up on special interim dividend plan

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 13.00

KUALA LUMPUR (Dec 13): GUINNESS ANCHOR BHD [] (GAB) shares rose on Tuesday after the company announced a single tier special interim dividend of 60 sen per 50 sen share for the financial year ending June 30, 2012, to be paid on Jan 20 next year.

At 9.35am, GAB added 64 sen to RM12.92 with 33,500 shares traded.

Maybank Investment Bank Bhd Research said that the company's plan to further reward shareholders with a special dividend was a pleasant, though not entirely surprising move.

'In fact, we see the potential for more capital management going forward, and thus, maintain a Buy on this stock for its resilient earnings and attractive net dividend yield of 9.8%.

'Our DCF-based target price is raised to RM13.00 from RM11.50,' it said on Tuesday.

OSK Research raises Guinness FV to RM14.20

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: OSK

Price Call: BUY

Target Price: 14.20

KUALA LUMPUR (Nov 4): OSK Research has raised the fair value for GUINNESS ANCHOR BHD [] to RM14.20 and is maintaining its Buy rating.

It said on Friday, GAB reported earnings of RM55 million in the first quarter ended Sept 30, 2011, which was a 43% increase year-on-year and 90% quarter-on-quarter, which was in line with its expectations. GAB's Tiger brand is now the best selling beer, while Guinness and Heineken registered double-digit growth.

'With no excise duty hike announced in the recent Budget 2012, we expect continued growth in industry volume, with Euro 2012 being an added near-term kicker. We raise our FV to RM14.20 and maintain our BUY rating,' it said.

Maybank Research upgrades Guinness to Buy

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: MAYBANK

Price Call: BUY

Target Price: 11.50

KUALA LUMPUR (Nov 3): Maybank Investment Bank Research has upgraded GUINNESS ANCHOR BHD [] to a Buy with a marginally higher target price of RM11.50 (from RM11.30) on raised earnings.

It said on Thursday that GAB's'' first quarter net profit for the period ended Sept 30 (1QFY12) of RM55.2 million (+42.7% YoY, 89.9% QoQ) were broadly above expectations.

Maybank Research said revenue hit a new record of RM445 million and margins expanding further.

'What is positive is that Guinness would appear to be gaining market share in the malt liquor market and with decent gross yields of about 5.6% in FY12 to boot, we upgrade our call to a Buy with a marginally higher target price of RM11.50 (from RM11.30) on raised earnings,' it said.

The research house said the 1QFY12 net profit accounted for about 26% of its full-year forecast and this is fairly strong, considering the fact that 2Q and 3Q are typically the seasonally better quarters for earnings. 1Q12 revenue growth was an impressive 21% YoY (+27% QoQ) to RM444.6m (+21.3% YoY, +27.5% QoQ).

Guinness Anchor's earnings dive due to one-off provisions

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: OSK

Price Call: BUY

Target Price: 13.58

Guinness Anchor Bhd
(Aug 9, RM10.06)
Maintain buy at RM10.52 with target price of RM13.58: Despite the flat revenue of -0.9% quarter-on-quarter, the earnings dive by 40.6% was largely due to provisions for the route to market restructuring. Essentially, the provisions arose from compensation paid to the company's dealers who were terminated as a result of GAB's distribution network rationalisation. The management said the provision is one-off and non-recurring. During the quarter, GAB also recognised some accelerated depreciation charges.

The management highlighted that the cost of ingredients (malt, for example) will remain stable through December (half of FY12) as these are under contract. However, this will increase in 2012 when contracts are renewed. Other things being equal, the management estimates the overall impact from cost increases at RM20 million for FY12. We believe this will be partially offset by the 4% price hike in April this year, which only affected its FY11 revenue in June. We believe that further mitigation of cost increases could also come from: (i) depreciation of the US dollar; and (ii) better cost efficiency from distribution network rationalisation.

GAB estimates its market share at 60%, outperforming the industry malt liquor market (MLM) volume. Volume from its main brand, Tiger, increased by 10% year-on-year (y-o-y) while Guinness rose by mid-single digits and Heineken in the mid-teens. Interestingly, the volume for Guinness stout from the on-trade modern channel (pubs and bars) rose 20%. We view this as an encouraging sign that Guinness is gaining popularity among younger drinkers, which we view as an under-tapped segment for the stout market. Kilkenny, which is sold via the on-trade modern channel, also showed a strong 50% volume jump.

We gather that geographically, sales in East Malaysia surged 20% y-o-y due to stricter government enforcement on smuggled beer sales, which make up about 80% of the market. Given the clampdown on beer smuggling, we believe that there is huge potential for GAB to increase sales in East Malaysia. The management added that it will be intensifying its focus there. ' OSK Research, Aug 9


This article appeared in The Edge Financial Daily, August 10, 2011.

Guinness keeps strong brew growing

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: AFFIN

Price Call: BUY

Target Price: 11.92

Guinness Anchor Bhd
Aug 8, RM10.52
Maintain buy at target price of RM11.92: Guinness Anchor Bhd's FY11 ended June was driven by stronger sales, higher pricing and writebacks of costs. GAB reported a net profit of RM181.4 million (+18.8% year-on-year) on the back of a 9.6% y-o-y increase in revenue for FY11. The strong results were driven by two key factors: (i) robust sales volumes for GAB's brands thanks to events such as FIFA World Cup 2010 viewing parties, Arthur's Day, St Patrick's Day and Oktoberfest celebrations; and (ii) the raising of beer prices due to soaring raw material costs, particularly aluminium for the cans and malt. GAB increased prices by approximately 3% in May 2010, followed by a second hike of 3% to 4% in April 2011.

The price hikes, coupled with cost savings from the 7% y-o-y appreciation of the ringgit against US dollar, allowed GAB to preserve its margins. The company also booked in writebacks of over-accrued costs in FY11. Though the exact quantum was not disclosed, the writebacks boosted net profit by 'several million'.

However, despite the strong full-year results, 4QFY11 was weak as net profit declined by 40.6% quarter-on-quarter. This was, however, mainly due to the timing of marketing expenses as well as provisions for route to market restructuring. According to the management, the provisions were attributed to the restructuring of its distribution network, allowing products to be delivered directly to key international accounts instead of through dealers. Ultimately, the direct distribution will result in cost savings, although the management remained mum as to the quantum for both the provision and expected cost savings. The provisions are one-offs and will not recur.

Going forward, GAB's strong earnings performance is expected to continue, bolstered by its dominant market portfolio and effective cost management policies.

GAB commands about 60% of the market with a stronger presence in the higher margin on-trade market. The company has already hedged its raw materials for CY11, which will keep raw material costs stable for the current 1HFY12.

Higher input costs are expected from Jan 2012 onwards. According to the management, the six-month impact of higher raw materials prices in 2HFY12 will be around RM20 million, assuming no counter measures are taken. However, GAB should be able to mitigate the impact via higher selling prices from the April 2011 increase and increased operational efficiencies. ' Affin Investment Bank, Aug 8


This article appeared in The Edge Financial Daily, August 9, 2011.

OSK Research upgrades GAB to Buy, raises TP to RM13.58

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD

Research House: OSK

Price Call: BUY

Target Price: 13.58

KUALA LUMPUR: OSK Research has upgraded GUINNESS ANCHOR BHD [] to a Buy with higher target price of RM13.58 (from RM10.18) and said the company's FY11 earnings of RM181 million (+19% y-o-y) came in above expectations by 9%.

For the 4Q period, the lower margins and earnings contraction were due to some provisions for market restructuring, the research house said in a note Aug 5.

'Moving forward, we expect GAB to register positive volume growth with the Euro 2012 as a kicker for next year's beer consumption.

'We do not expect an excise duty hike in the upcoming budget. A final DPS of 44 sen was declared. We raise our FY12-13 earnings by 19-27% and upgrade GAB to BUY based on our remodeled FCFF valuation," it said.

GAB - Tenth consecutive year of growth for GAB?

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD
Research House: MAYBANK

Guinness Anchor Bhd
(Feb 21, RM9.50)
Upgrade to Buy at RM9.35 with target price RM10.60: Post analyst briefing for 1HFY11 results, we have tweaked our FY11/13 net profit forecasts, but compound annual growth rate (CAGR) remains little changed at 11%. GAB continues to grow market share while domestic economic conditions remain conducive for industry demand growth. The recent correction in its share price provides an opportunity to accumulate. We retain our RM10.60 discounted cash flow-based target price, and investors could also expect decent gross dividend yields of 5% to 5.5%.

GAB's market share in Malaysia continued to grow, reaching 59% in 1HFY11 (FY10: 57%). We believe GAB will at least sustain its market share. We expect the domestic malt liquor market to grow 4% this year to surpass its peak of 1,513 hectoliters in 1998, based on our estimated GDP growth of 5.5% for 2011. GAB's management expect the malt liquor market to grow 4%-5% this year, mirroring the movement of GDP growth.

GAB went from organising four parties in 2006 to 700 in 2010. Despite millions of ringgit spent on brand building over the years, we positively view the earnings before interest and tax compound annual growth rate of 9.8% from FY06 to FY10 compared with its distribution, selling and marketing expenses CAGR of -10.4% over the same period. Advertising and promotion remains vital for GAB; we expect the company to retain its spending of RM146 million in FY10.

Details on the costs write-back of RM15 million, we estimate, based on normalised margins, which contributed to the strong 2QFY11 performance (net profit +48% year-on-year, +67% quarter-on-quarter) were not disclosed but would be one-off, according to management. The actual amount of cost write-back was also not disclosed. ' Maybank IB Research, Feb 21


This article appeared in The Edge Financial Daily, February 22, 2011.

GAB - Buy Guinness Anchor: UOB Kay Hian

Stock Name: GAB
Company Name: GUINNESS ANCHOR BHD
Research House: UOB

Guinness Anchor Bhd., Malaysia’s biggest brewer by market value, was raised to “buy” from “hold” at UOB Kay Hian Holdings Ltd to reflect its sales and market-share prospects.

The share-price estimate was increased to RM10.30 from RM9.20, Vincent Khoo, an analyst at UOB Kay Hian, wrote in a report today. - Bloomberg