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This article first appeared in The Edge Financial Daily on December 21, 2017

Heineken Malaysia Bhd 
(Dec 20, RM18.70)
Maintain hold call with an unchanged target price (TP) of RM18.30 per share:
At its analyst briefing yesterday, we met with the new chief financial officer (CFO) Szilard Voros. The previous CFO, Teo Hong Keng, resigned to pursue other opportunities. On its nine-month financial year 2017 (9MFY17) results, revenue grew only a moderate 1% largely due to phasing of earlier Chinese New Year sales in fourth quarter (4QFY16). 9MFY17 pre-tax profit, however, grew 7% on its cost management drive.  

Recall that Heineken launched Apple Fox (mainstream cider) in August 2017. Together with Strongbow (premium cider) in the cider category, Heineken shared that this has been one of the fastest growing categories for the group. Heineken had also in early December 2017 launched Tiger Radler Lime & Mint (0% alcohol) to further complete its near-beer category product portfolio. Heineiken’s core portfolio (Tiger, Heineken and Guinness) still contributes more than 80% of group revenue. On channel mix in general, Heineken shared that in the past year or so that it has seen some shifts from the on-trade (generally higher margins) to off-trade channel. However, we understand that this trend seems to have been arrested in 3QFY17. 

Elsewhere, there are no new developments on the bills of demand from the Customs (RM56 million) dated Aug 28, 2015. We make no changes to our earnings forecasts. — Maybank IB Research, Dec 19

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