Fundamental Analysis as of FY14 – http://www.slideshare.net/lcchong76/carlsbg-fundamental-analysis-fy14
Excel – http://1drv.ms/1TpUkd3
Latest Financial – Q3 2015 Financial Report (30 Nov 2015) http://www.bursamalaysia.com/market/listed-companies/company-announcements/4937213
Peer Comparison – http://www.slideshare.net/lcchong76/alcoholic-klse-peer-comparison
FY16 Q1 Results Highlight:
- For the third quarter, the Group’s revenue decreased by 0.9% to RM405.7 million compared to the same quarter last year.
- Profit after tax increased by 8.4% to RM 63.7 million to RM58.8 million YoY.
- The Malaysian operations recorded a decline in revenue of 10.0% to RM263.2 million due to revenue impact from the LHFB divestment as well as the later timing of trade stock-up ahead of the government’s National Budget 2016.
- In Singapore, the business continued to gain traction. Revenue grew by 21.8% to RM142.5 million whilst operating profit improved by 80.4% to RM36.0 million. The improved result was driven by higher sales volume, effective cost control, increased contribution from the Maybev acquisition as well as the strengthening of the Singapore Dollar against the Ringgit.
- For the period ended 30 September 2015, the Group recorded revenue of RM1,237.4 million, 2.2% higher than last year.
- The Malaysian operations recorded a decline in revenue of 6.8% to RM853.5 million.
- For Singapore operations, revenue grew by 29.8% to RM383.9 million whilst operating profit improved by 55.3% to RM69.7 million.
- Absolute EY%:
- FY14 (EPS: 0.692) – 13.360 (Uncertainty Risk: MEDIUM)
- R4Q (EPS: 0.668) – 12.904 (Uncertainty Risk: MEDIUM)
- FY16 (EPS: 0.715 ± 5%) – From 13.121 to 14.502 (Uncertainty Risk: MEDIUM)
- FY17 (EPS: 0.757 ± 5%) – From 13.877 to 15.338 (Uncertainty Risk: LOW to MEDIUM)
- EPS applied to reach the current stock price (11.64): 0.603
- FY14 (EPS: 0.692) – 13.05 (Uncertainty Risk: MEDIUM)
- R4Q (EPS: 0.668) – 12.60 (Uncertainty Risk: MEDIUM)
- FY16 (EPS: 0.715 ± 5%) – From 12.82 to 14.16 (Uncertainty Risk: MEDIUM)
- FY17 (EPS: 0.757 ± 5%) – From 13.55 to 14.98 (Uncertainty Risk: LOW to MEDIUM)
- 5-Y DCF:
- Good Scenario (8.0% – 10.0%): From 11.48 to 12.29 (Uncertainty Risk: HIGH)
- Base Scenario (5.0% – 7.0%): From 10.35 to 11.09 (Uncertainty Risk: VERY HIGH)
- Bad Scenario (2.0% – 4.0%): From 9.31 to 9.99 (Uncertainty Risk: VERY HIGH)
- Ugly Scenario (-2.0% – 0.0%): From 8.07 to 8.67 (Uncertainty Risk: EXTREME)
- At current price (11.64), based on RDCF, assumption of FCFF growth rate in the next 5 years is 8.5%.
- In my opinion, fair value of CARLSBG range from 12.5 to 13.5. Uncertainty risk of fair value is MEDIUM.
- I remain conservative and skeptical above volume growth in the brewery sector as some reports show that the industry is saturated. However, earnings should be sustainable at current levels.
- Valuation wise, CARLSBG is fully or over valued, but its Dividend Yield is 6.4%. You basically pay premium to buy an outstanding dividend counter.
At the time of writing, I owned shares of CARLSBG.