GAB brews and sells beer, as simple as that. Its line up by category.
Beer
Tiger
Anchor
Heineken
Stout
Guinness
Premium Beer
Kilkenny
Paulaner
Strong bow
Sol
Malt & Shandy
Malta
Anglia
Tiger, Guinness, Heineken, Anchor, Kilkenney and Malta are brewed locally while Strongbow, Paulaner and Sol are imported.
The one closest to my heart, and gut, is Paulaner. Whoops, off topic.
GAB Bhd has presence only in Malaysia. No participation in regional markets via subsidiaries, unlike Carlsberg's model. However, GAB has the largest market share in Malt Liquor Market (MLM) locally at roughly 59%.
GAB is a dividend share, dishing out close to 90% of nett profit as dividends to shareholders. Dividend yield is 5% for FY2010 and FY2011. Better than FD at 3.x%. The share price is also doing extremely well. CAGR from 2007-2011 is 14.5%. If I had bought GAB in 2007 at 5.90 and held it till 2011, I would have gotten returns of ~19.5% annually. Fantastic.
GAB weathers recession really well. A strong defensive stock that was not affected by the 2008 great recession, in terms of revenue and profit.
Guinness Stout rules over Royal Stout, no contest about that. Volume of Guinness stout rose a mid-single digit in FY2011 but pubs/bars sales rose 20%, possibly indicating the younger crowd developing a taste for stout, an under-tapped segment.
In FY2011, Tiger volume rose by 10% and Heineken in mid teens.
GAB's new launches are Newcastle Brown Ale, an imported beer and new variant of Anglia Shandy, Orange and Grape.
Caveats
Malt Liquor Market (MLM) in Msia has not grown in the past 14 years. Consumption per capita actually decreased by CAGR -2.3% in the period from 2004-2009.Perhaps inline with the decrease of non-muslims in Msia.
Beer is slapped with very high excise duty. Highest in the region and 2nd highest in the world! We escaped a hike in 2011 but no guarantees for 2012. GAB’s percentage of excise duties to sales revenue is 50.4%
Gross profit margin has been flattish for the past 7 years.
Beer
Tiger
Anchor
Heineken
Stout
Guinness
Premium Beer
Kilkenny
Paulaner
Strong bow
Sol
Malt & Shandy
Malta
Anglia
Tiger, Guinness, Heineken, Anchor, Kilkenney and Malta are brewed locally while Strongbow, Paulaner and Sol are imported.
The one closest to my heart, and gut, is Paulaner. Whoops, off topic.
GAB Bhd has presence only in Malaysia. No participation in regional markets via subsidiaries, unlike Carlsberg's model. However, GAB has the largest market share in Malt Liquor Market (MLM) locally at roughly 59%.
GAB is a dividend share, dishing out close to 90% of nett profit as dividends to shareholders. Dividend yield is 5% for FY2010 and FY2011. Better than FD at 3.x%. The share price is also doing extremely well. CAGR from 2007-2011 is 14.5%. If I had bought GAB in 2007 at 5.90 and held it till 2011, I would have gotten returns of ~19.5% annually. Fantastic.
GAB weathers recession really well. A strong defensive stock that was not affected by the 2008 great recession, in terms of revenue and profit.
Guinness Stout rules over Royal Stout, no contest about that. Volume of Guinness stout rose a mid-single digit in FY2011 but pubs/bars sales rose 20%, possibly indicating the younger crowd developing a taste for stout, an under-tapped segment.
In FY2011, Tiger volume rose by 10% and Heineken in mid teens.
GAB's new launches are Newcastle Brown Ale, an imported beer and new variant of Anglia Shandy, Orange and Grape.
Caveats
Malt Liquor Market (MLM) in Msia has not grown in the past 14 years. Consumption per capita actually decreased by CAGR -2.3% in the period from 2004-2009.Perhaps inline with the decrease of non-muslims in Msia.
Beer is slapped with very high excise duty. Highest in the region and 2nd highest in the world! We escaped a hike in 2011 but no guarantees for 2012. GAB’s percentage of excise duties to sales revenue is 50.4%
Gross profit margin has been flattish for the past 7 years.
Source: GAB Annual Report Year 2011
Wheat barley, key ingredient in brewing beer, is forecasted to rise 30-40% in Year 2012. Aluminium for canning is also expected to rise. Raw material and packaging costs accounts for 9.95% of revenue.GAB’s ties with Asia Pacific Brewery (APB), GAB's parent company, provide access to bulk purchases of key ingredients such as aluminium and wheat. Therefore, moderating some of the volatility in commodities. On this point, I'm not too worried as GAB has always been able to pass the cost down to consumers. Its most recent price hike was in 2011.
In Summary
GAB is a market leader, approximately 59% of market share. It has strong branding and loyal following. Consumers are unlikely to switch to a slightly cheaper product, unlike products like toilet-rolls. As a stock, it is low beta, dividend-paying stock and enjoys a steady appreciation in share price. Its biggest competitor is ofcourse, Carlsberg. In the premium beer segment, Starker by the 3rd player after GAB and Carlsberg puts up a good fight with OverTime pubs popping up like mushrooms all over Klang Valley.
GAB is good in many areas, but I search hard for a growth catalyst and fail to find one. I expect slow and steady growth, but nothing explosive.
Wheat barley, key ingredient in brewing beer, is forecasted to rise 30-40% in Year 2012. Aluminium for canning is also expected to rise. Raw material and packaging costs accounts for 9.95% of revenue.GAB’s ties with Asia Pacific Brewery (APB), GAB's parent company, provide access to bulk purchases of key ingredients such as aluminium and wheat. Therefore, moderating some of the volatility in commodities. On this point, I'm not too worried as GAB has always been able to pass the cost down to consumers. Its most recent price hike was in 2011.
In Summary
GAB is a market leader, approximately 59% of market share. It has strong branding and loyal following. Consumers are unlikely to switch to a slightly cheaper product, unlike products like toilet-rolls. As a stock, it is low beta, dividend-paying stock and enjoys a steady appreciation in share price. Its biggest competitor is ofcourse, Carlsberg. In the premium beer segment, Starker by the 3rd player after GAB and Carlsberg puts up a good fight with OverTime pubs popping up like mushrooms all over Klang Valley.
GAB is good in many areas, but I search hard for a growth catalyst and fail to find one. I expect slow and steady growth, but nothing explosive.
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