TA Research tweaked its estimations for FY25 and FY26 core earnings slightly upwards by 0.2% and 0.6% to RM360.6mil and RM397.2mil, respectively.
PETALING JAYA: Carlsberg Brewery Malaysia Bhd
may face elevated inflationary pressures and high operating as well as advertising and promotional costs in its financial year 2025 (FY25).
Hong Leong Investment Bank (HLIB) Research stated that elevated A&P is expected to persist in FY25 “especially given that Sapporo Singapore’s market share has yet to match the performance of its predecessor Asahi”.
The weaker sales from the Singaporean market had offset the stronger sales from Malaysia. It was noted that the lower sales in the Singaporean market was attributable to the delisting of Asahi.
On a brighter note, HLIB Research said sales growth for FY25 is expected to be bolstered by the strong outlook for Malaysia, anticipated increase in sales from Sapporo, as well as the full impact of average selling price hikes.
“Although its profitability may be under pressure from higher A&P costs, this could be partially offset by the potential strengthening of the ringgit versus the US dollar,” it added.
For the fourth quarter ended Dec 31, 2024, the brewery’s net profit rose 1% year-on-year to RM78.8mil, reflecting a basic earnings per share of 25.77 apiece.
Its revenue increased to RM587.23mil as compared to RM580.53mil in the same quarter of the previous year.
For the entire year, Carlsberg had recorded a net profit of RM337.08mil and revenue of RM2.38bil. The group had declared a final dividend per share amounting to a total of RM1 for FY24.
Meanwhile, RHB Research stated that while it did not expect the group’s sales volume to grow rapidly due to inflationary pressures as steady consumption trend is likely to sustain into FY25.
RHB Research said this would be underpinned by tight enforcement to keep contraband trade at bay, whilst tourist arrivals rise in disposable income would provide further support.
“Its current below-mean valuation is attractive, in view of its solid earnings growth and dividend payout – despite the cautious consumer sentiment and environment of rising operating costs.
“We believe this is sustainable based on demand stickiness, encouraging trend of tourist arrivals into Malaysia, margin uplift brought about by a premiumised product mix and price increases,” the research house added.
TA Research noted that to mitigate the risks associated with continuous rising costs, Carlsberg Malaysia is looking to continue focusing on its premiumisation strategy and cost optimisation initiatives.
It tweaked its estimations for FY25 and FY26 core earnings slightly upwards by 0.2% and 0.6% to RM360.6mil and RM397.2mil, respectively.
It also forecast FY27 core earnings at RM421.6mil.
All three brokerages maintained a “buy” recommendation on Carlsberg.
HLIB Research had set the highest target price at RM31.08 a share followed by TA Research at RM24.10 and RHB Research at RM22.50.
