9MFY15 earnings of MYR170.2m (+12.5% YoY) met our expectations. Downgrade to NEUTRAL (from Buy) with an unchanged TP of MYR14.10 (5% downside), as we believe most of the upside has been priced in. Although 3QFY15 sales rose strongly by 17.4% YoY, 3Q earnings onlygrew 11% YoY due to an unfavourable pack mix. Dividend yields for FY15-17F remain decent at 4.7-5%.

• 3QFY15 (Jun) earnings were in line with our forecast but aboveconsensus expectations, with 9MFY15 earnings of MYR170.2mrepresenting 74% and 78% of the respective FY15 earnings forecasts.Although 3QFY15 sales grew 17.4% YoY on the back of a 12.6% YoY increase in sales volume, earnings only grew 11% YoY due to a decline in EBIT margin to 12.4% (3QFY14: 13.2%). The slide was attributed to an adverse pack mix from higher promotions in conjunction with the Lunar New Year which fell in mid-February this year, as opposed to endJanuary last year. No dividend was declared for the quarter under review.
• Prices inclusive of GST go up. Upon implementation of the goods and services tax (GST) on 1 Apr, we understand from management that its product prices have gone up by 1-4%, depending on distribution channels. Similar to its competitor Carlsberg (CAB MK, NEUTRAL, TP: MYR14.10), there was a short period of sales disruption prior to the GST implementation. However, we gather from management that there was no big difference in its sales volume pre- and post-GST.
• Forecasts and risks. With the results in line, we make no changes to our earnings forecasts. Key risks to our recommendation are: i) weakerthan-expected sales volume, ii) an excise duty hike, and iii) intensified competition from contraband beers.
• Downgrade to NEUTRAL with an unchanged TP of MYR14.10.Although we like Guinness for its defensive quality and decent yields, we downgrade the stock to NEUTRAL (from Buy) with an unchanged DDMderived TP of MYR14.10, as we believe most of the upside has been priced in given the share price run-up since February. Valuations are not especially compelling with the stock currently trading at FY16F P/E of 19.2x, although dividendyields for FY15-17F remain decent at 4.7-5%.