Yesterday, GAPL Pte Ltd (GAPL) announced that Heineken NV is now a controlling shareholder after acquiring Diageo’s remaining 50% stake, which in turn increases Heineken’s shareholding in GAPL to 100%. Note that Diageo previously held a 51% stake in Guinness Anchor Berhad (GAB) – which is listed on the Malaysian stock exchange – through privately owned GAPL, which is also the licensee for Guinness and ABC Stout distribution for the Singapore market. (Source: Bursa Malaysia)

Comment: We are neutral on this development as fundamentally there will be no change in GAB’s business strategy and the group will continue to benefit from the access to both Heineken’s and Diageo’s international brand portfolios. Thus, we maintain our earnings forecasts with no change to our DCF-based TP of RM14.05. The group’s positive operating cash flows and healthy balance sheet should ensure healthy dividend yields of ~5% over the next few years, which should continue to be supportive of its share price. Maintain HOLD.

Source: Affin Hwang Capital Research - 8 Oct 2015