CEO Morning Brief

Carlsberg’s Sales Channels May Remain Subdued in 3Q2023 But Improve in 4Q2023, Says Maybank IB

Publish date: Thu, 17 Aug 2023, 08:56 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (Aug 16): Maybank Investment Bank (Maybank IB) Research has maintained its “buy” rating on Carlsberg at RM20.68 with an unchanged target price (TP) of RM24.70 and said the brewer’s second quarter of 2023 (2Q2023) results came in within expectations.

According to a note on Wednesday (Aug 16), the research house said it believes that sales momentum across Carlsberg’s sales channels may remain subdued in 3Q2023 before improving in 4Q2023 on the back of seasonally stronger festive spending.

The researvh house said Carleberg's first half 2023 mainstream and premium volumes fell 8% year-on-year (y-o-y) and 14% y-o-y respectively.

“Adding support to group earnings growth in FY2023 will also be the absence of Cukai Makmur.

“We keep our earnings estimates, 'buy' call and DCF (discounted cash flow)-TP of RM24.70 (WACC [weighted average cost of capital]: 8%, LTG [long-term growth]: 2.5%),” it said.

Maybank IB said with waning consumer consumption, Carlsberg will continue to increase its advertising and promotion spending in order to drum up sales momentum for both its on and off-trade channels, especially within its mainstream category.

Premium offering

“Meanwhile, following its non-renewal of Asahi’s distribution agreement for Malaysia and Singapore, Carlsberg is in the process of bringing in another premium offering to boost its premium portfolio (Kronenbourg 1664, Connor’s Stout Porter, Somersby) but has not shared the brand name at this juncture,” it said.

Source: TheEdge - 17 Aug 2023

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