KUALA LUMPUR: Heineken Malaysia Bhd
shares climbed in early trade Thursday following an earnings report that matched analysts' expectations.
The brewer gained 56 sen to RM22.46, making it the top gainer on Bursa Malaysia with 13, 400 shares traded.
In the second quarter ended June 30 (2Q24), Heineken posted a higher net profit of RM91.1mil from RM90.5mil a year earlier while revenue dropped to RM565.5mil from RM569.2mil in the same period last year.
In the first six months, its net profit rose to RM213.6mil from RM204.4mil and revenue rose to RM1.35bil from RM1.31bil a year prior.
The company announced a single interim dividend of 40 sen to be paid on Oct 30.
Hong Leong Investment Bank Research (HLIB Research) said Heineken’s 2Q24 core net profit of RM91.1mil brought 6MFY24 core earnings to RM213.6mil.
“This result came in within our and consensus expectations, accounting for 53% of our full-year forecasts, respectively,” it said.
Notably, HLIB Research reported that Heineken experienced low single-digit growth in beer sales volume year-to-date (YTD), aligning with the firm's narrative of a recovery in sales volume.
“Going into 2H24, we expect this trend to continue, supported by a gradual improvement in labour market conditions and a continued influx of tourist arrivals. The appreciation of the ringgit against the US dollar should also help alleviate Heineken’s cost pressures,” it added.
The research house had maintained a “buy” rating on Heineken with an unchanged target price of RM30.71, based on a PE multiplier of 23.0x applied to its FY24F EPS of 133.5 sen.
Meanwhile, TA Securities said Heineken’s 1H24 core earnings increased by 6.6% YoY to RM213.6mil, accounting for 51% of its full-year forecast and 53% of consensus estimates.
The earnings increase was driven by cost efficiencies and the successful execution of strategic commercial initiatives, including the Chinese New Year campaign in 1Q24.
To recap, Heineken adjusted prices for selected products in April 2024 to manage rising input costs. The last price hike occurred in July 2022, with an increase of about 8% to 10%.
“Despite this recent adjustment, we expect consumer demand to remain resilient.
“Overall, we believe that 2H24 performance will remain robust, supported by higher on-trade sales, price revisions, and increased international tourist arrivals,” TA said.
It has reiterated its “buy” call on Heineken with a new target price of RM28.02.
