Heineken earnings growth to be supported by cost management drive

KUALA LUMPUR: Maybank Investment Research has maintained its earnings forecasts, Hold call and target price of RM18.30 for Heineken Malaysia Bhd as it expects earnings growth to be supported by its ongoing cost management drive and a seasonally strong 4Q earnings on festivities demand.

Heineken's 9M17 revenue grew a moderate 1% largely due to the phasing of earlier Chinese New Year sales in 4Q16, while pretax profit grew 7% on its cost management drive.

Heineken told Kenanga Research that its cider has been one of the fastest-growing categories for the group. Heineken had also in early December 2017 launched Tiger Radler Lime & Mint to further complete its near-beer category product portfolio.

Its core portfolio of Tiger, Heineken and Guinness contribute more than 80% of group revenue. 

While there has been some shift from the on-trade to off-trade channel, this trend seems to have been arrested in 3Q17, it said.