CARLSBG – Fundamental Analysis (1 Dec 2014)

CARLSBG Analysis:-

Excel – http://1drv.ms/11H9u84

My View:-

– Fair values/Market Timing:
  – 5-Y DCF:
    – Base Scenario: 7.02 (Fair Value Uncertainty: EXTREME)
    – Good Scenario: 8.01 (Fair Value Uncertainty: EXTREME)
    – Bad Scenario: 6.14 (Fair Value Uncertainty: EXTREME)
    – Ugly Scenario: 5.36 (Fair Value Uncertainty: EXTREME)
  – Absolute EY%:
    – Trailing:
      – FY13 (EPS: 0.602) – Fair value 12.34 (Fair Value Uncertainty: HIGH)
      – R4Q (EPS: 0.696) – Fair value 14.28 (Fair Value Uncertainty: MEDIUM)
    – Forward:
      – FY14 (EPS: 0.636) – Fair value 13.05 (Fair Value Uncertainty: MEDIUM)
      – FY15 (EPS: 0.656) – Fair value 13.47 (Fair Value Uncertainty: MEDIUM)
    – EPS applied to reach the current stock price (12): 0.585
– Going forward, I remain conservative and skeptical above volume growth in the brewery sector as some reports show that the industry is saturated, coupled with several other external factors such as rising fuel costs, inflation as well as potential exposure to excise duty hike in the near future. However, earnings should be sustainable at current levels.
– CARLSBG is determined to move away from a single star beer product company to become a star beer portfolio company. Over the past 10 years, CARLSBG has been trying to launch a couple of new products into the market. To date, however, its Carlsberg Green Label is still viewed as the group’s only crown jewel. As such, a reshuffle has been undertaken in its top management team over the last 2 to 3 years with the aim of bringing good changes to the group. Besides, it has also appointed a few brand managers to oversee the brand building efforts across a few main products, whereby premium brands are expected to form a larger proportion of its new product portfolio. While efforts are being made to build market share for its premium products, the Carlsberg Green Label will remain as the bread and butter of the group. Whether or not CARLSBG will be able to return to its former glory, it is still too early to tell, but the good efforts warrant CARLSBG a buy/hold call for the long term. There are downside risks if things do not turn out as expected.

Latest Financial – Q3 2014 Financial Report (28 Nov 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1809709

At the time of writing, I owned shares of CARLSBG.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s