Affin Hwang maintains Hold on Carlsberg, TP at RM24.60

  • Analyst Reports
  • Friday, 16 Aug 2019

KUALA LUMPUR: Affin Hwang Capital research maintained its hold call on CARLSBERG BREWERY MALAYSIA BHD with an unchanged target price of RM24.60 following the release of the latter's first-half results, which came broadly in line with expectations.

In the first half of 2019, Carlsberg's net profit grew 5.3% to RM153mil on improved volume sales across its major segments.

"Core earnings increased by 5% yoy, as organic sales grew 13% which was attributable to both local and SG operations, offset by higher A&P expenses and an uptick in raw material costs during the period," said Affin Hwang.

Associate contributions dropped to RM4.6mil due partially to the terrorist bombings in Sri Lanka.

Quarter-on-quarter, the group's earnings were 25% lower due to seasonality as the Chinese New Year sales subsided over the quarter.

"For 2H19, we believe margins would improve from the easing of A&P spend which was focused in 1H19 on the relaunching of its core Carlsberg portfolio and investment in brand activation of its premium products alongside its recently launched Brooklyn Lager IPA," said Affin Hwang.

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