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Tuesday, July 19, 2016

HEIM: Earnings Continued to Rise

Results Update

Heineken Malaysia Bhd ('HEIM') has just announced its results for QE30/6/2016. Its net profit increased by 20% q-o-q or 38% y-o-y to RM60.9 million while turnover was unchanged q-o-q but rose 16% q-o-q to RM460 million. HEIM's PBt rose 16% q-o-q due to different timing of branding building & promotional activities.


Table: HEIM's last 8 quarterly results

From Chart 1 below, we can see that HEIM's top-line has been growing steadily. In the last 2 years, bottom-line has finally inched higher- brought on by higher profit margins.


Chart 1: HEIM's last 43 quarterly results

Valuation

HEIM (closed at RM16.92 yesterday) is now trading at a trailing PER of 19.2 times (based on last 4 quarters' EPS of 87.94 sen). Its dividend yield is fairly reasonable at 5.0%. Based on last year's earnings growth of about 24%, PEG ratio can be computed to be 0.8 x. All these multiples show that HEIM is still fairly attractive.

Technical Outlook

HEIM has broken above its triangle at RM14.50-15.00. The first projected target is RM17.00-17.50.


Chart 2: HEIM's weekly chart as at July 18, 2016 (Source: Shareinvestor.com)

If foreign funds are hungry enough to pay for decent yield, HEIM may retest its 2013 high of RM22.00.


Chart 3: HEIM's monthly chart as at July 18, 2016 (Source: Shareinvestor.com)

Conclusion

Based on good financial performance, fairly attractive valuation & bullish technical outlook, HEIM could be a good stock for your investment portfolio.

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, KESM.

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