KUALA LUMPUR (Aug 26): Heineken Malaysia Bhd was the third top gainer at the time of writing today as the stock rose 20 sen or 0.89% to RM22.70 after the company returned to the black for the second quarter ended June 30, 2021 (2QFY21).
Heineken Malaysia posted a net profit of RM25.27 million for 2QFY21, compared to a net loss of RM18.19 million a year earlier.
Revenue for the quarter rose 37.71% to RM349.42 million from RM253.74 million for the same period a year ago.
For the six-month period (1HFY21), net profit soared 154.86% to RM98.81 million from RM38.77 million a year earlier, while revenue grew 16.57% to RM897.16 million from RM769.63 million.
The group also declared an interim dividend of 15 sen per share for FY21, payable on Nov 18.
CGS-CIMB Research upgraded the stock to an "add" from a "hold" today. It kept its target price (TP) unchanged at RM24.20.
The research house in a report said this was due to the stock’s attractive valuation (its calendar year 2022 forecast price-earnings is at an 11% discount to its five-year mean of 27 times), a strong balance sheet (net cash of RM105.7 million as at end-2QFY21) and benefits from the potential recovery in economic activities nationwide, especially in the on-trade segment.
“As of Aug 20, Heineken Malaysia said that 80% of its employees were fully vaccinated. It aims to fully vaccinate all its essential workers by Sept 21.
"In addition, Heineken Malaysia has implemented various Covid-19 screening measures at its plants, such as Covid-19 testing of all on-site employees and contractors on a biweekly basis. Also, the company has stated that its brewery is fully automated, which requires only a minimal number of essential workers to be on site,” the research house added.
Yesterday, Heineken Malaysia told media and analysts that it was taking a cautious view on the outlook for the financial year ending Dec 31, 2021 (FY21) due to the possibility that the highly infectious Delta variant of Covid-19 may erode consumer confidence and affect the brewer’s recovery path ahead.