Another record year projected for local brewers


KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd Heineken Malaysia Bhd are expected to register another record sales performance in 2020, says Affin Hwang Capital research.

The research house expects total earnings to register 10% growth in 2020 with margins projected to hold up due to easing production input costs expected.

The brewers' volume sales are supported by healthy consumption trends under a captive duopoly malt liquor market, while higher tourist arrivals from Visit Malaysia 2020 and the ongoing clampdown on contraband alcohol could help to boost demand.

"Both Carlsberg and Heineken’s medium-term outlooks remain positive, with growth catalysts for the former arising from premiumisation, while the latter stands to benefit from its e-commerce foray and new product launches," it added.

The brewers have showed commendable earnings delivery in recent quarters with double-digit top-line growth registered since 4Q18 despite three successive round of price hikes from April 2019 to April 2019.

"While this was partially attributable to the clampdown in contraband alcohol (said to command 20-30% of the malt liquor market), the sustainable growth drivers are nonetheless tied to an expanding market size and favourable consumption patterns, in our view," said Affin Hwang.

It maintained its hold call on Carsberg with a higher target price of RM28.50 following its recent share-price outperformance and kept its buy call on Heineken with a raised target price of RM29.

"Heineken is our preferred pick as the sector laggard, with implied upside of 15% and higher 2019-21E yields of c.4-5%," it added.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!
   

Next In Business News

World stocks upbeat on hopes for China re-opening, inflation peaking
Tabung Haji confident of registering competitive profits this year despite challenges
PETRONAS' net profit more than double in the first nine months
Capital A posts bigger loss in 3Q, maintains positive outlook
Axiata, Telenor complete Celcom-Digi merger
Bank Islam posts higher net profit of RM142.86mil in 3Q
Raja Teh Maimunah appointed as CEO of Aeon’s digital bank
Ringgit ends higher against US dollar on positive China sentiment
BCorp expects satisfactory performance in FY23
TCS wins RM119mil construction contract

Others Also Read