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Wednesday, May 18, 2016

Carlsbg: Earning Dipped

Results Update

In QE31/3/2016, Carlsbg's net profit dropped 15.5% q-o-q to RM62.9 million on a 8%-increase in revenue to RM456 million. When compared to the corresponding quarter last year, net profit rose 33% while revenue increased by 6%.

Eevenue rose q-o-q due to CNY festive period. However, its PBT dropped due to higher operating expenses to run the CNY festive campaign and share of loss of RM1.17 million from its associate, Lion Brewery (Ceylon) PLC (as compared to a share of profit of RM5.26 million in QE31/12/2015). 


Table 1: Carlsbg's last 8 quarterly results

From Chart 1 below, we can see that Carlsbg's revenue, profits & profit margins are all grinding higher.


Chart 1: Carlsbg's last 42 quarterly results

Valuation

Carlsbg (closed at RM12.84 yesterday) is now trading at a PE of 17 times (based on an annualized EPS of 75.76 sen). At this PER, Carlsbg is deemed fairly valued. What's attractive about this stock is its high dividend yield of 6.0%.

Technical Outlook

Carlsbg is now leaning against its steep uptrend line, S2-S2 with support at RM12.70. A break of this uptrend line will bring forth more selling akin to the downtrend witnessed in May-December 2015.


Chart 2: Carlsbg's weekly chart as at May 17, 2016 (Source: ShareInvestor.com)

From the monthly chart, it looks like Carlsbg may continue with its prior uptrend- possibly after a pullback. After all, its MACD has crossed above its MACD signal line.


Chart 3: Carlsbg's monthly chart as at May 17, 2016 (Source: ShareInvestor.com)

Conclusion

Based on satisfactory financial results, fair valuation & constructive technical outlook, I would rate Carlsbg a HOLD for now.

 Note:
In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of,Carlsbg.

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