At Closing on 27-Dec-2011
KLCI Index : 1500.91
P/E Ratio : 16.1198
Tuesday, December 27, 2011
Monday, December 26, 2011
KLSE FTSE Bursa Malaysia KLCI P/E as at 23-Dec-2011
At Closing on 23-Dec-2011
KLCI Index : 1496.15
P/E Ratio : 16.0687
KLCI Index : 1496.15
P/E Ratio : 16.0687
Thursday, December 22, 2011
KLSE FTSE Bursa Malaysia KLCI P/E as at 22-Dec-2011
At Closing on 22-Dec-2011
KLCI Index : 1491.46
P/E Ratio : 16.0183
KLCI Index : 1491.46
P/E Ratio : 16.0183
KLSE FTSE Bursa Malaysia KLCI P/E as at 21-Dec-2011
At Closing on 21-Dec-2011
KLCI Index : 1484.98
P/E Ratio : 15.9488
KLCI Index : 1484.98
P/E Ratio : 15.9488
KLSE FTSE Bursa Malaysia KLCI P/E as at 20-Dec-2011
At Closing on 20-Dec-2011
KLCI Index : 1465.17
P/E Ratio : 15.736
KLCI Index : 1465.17
P/E Ratio : 15.736
Tuesday, December 20, 2011
A very blissful time off day
It has been a week since I left the Away Message on my work email outlook. I'm feeling terrific. No signs of lethargy or shoulder pain. I feel at ease, no, better.. I feel alive, very alive.
I'm poking this entry on my mobile blogger while sipping a long black with jazz playing in the background at a quaint coffee shop. I am feeling such pleasure that I just have to stop reading my book and whip out my phone to pen this moment.
This is how I want to live. With a choice. Freedom to execute my day in the way I want it to be. To be untrapped. To really live.
I'm poking this entry on my mobile blogger while sipping a long black with jazz playing in the background at a quaint coffee shop. I am feeling such pleasure that I just have to stop reading my book and whip out my phone to pen this moment.
This is how I want to live. With a choice. Freedom to execute my day in the way I want it to be. To be untrapped. To really live.
FBM KLCI Market PE as at 19 Dec 2011
At Closing on 19 Dec 2011
KLCI Index : 1477.78
KLCI PE : 15.9346
KLCI Index : 1477.78
KLCI PE : 15.9346
Saturday, December 17, 2011
Thursday, December 15, 2011
Wednesday, December 14, 2011
Year end break
I'll be taking a short family vacation from today till next Thursday. KLCI PE Ratio Daily updates will be published as usual if there is Internet connection available.
The story on petronas Dagangan will have to wait while I get some sun, sea and sand.
The story on petronas Dagangan will have to wait while I get some sun, sea and sand.
Tuesday, December 13, 2011
KLSE FBM KLCI PE Ratio as at 13-Dec-2011
At Closing on 13-Dec-2011
KLCI Index : 1465.39
P/E Ratio : 16.0055
KLCI Index : 1465.39
P/E Ratio : 16.0055
Monday, December 12, 2011
KLSE FTSE Bursa Malaysia P/E as at 12-Dec-2011
At Closing on 12-Dec-2011
KLCI Index : 1467.1
P/E Ratio : 16.025
KLCI Index : 1467.1
P/E Ratio : 16.025
Sunday, December 11, 2011
Seminar: Creating Multiple Sources Of Income
How To Prepare For The
Coming Economic Downturn With Multiple Sources Of Income
I attended the above
titled seminar 2 Thursdays ago on 1st December 2011. The seminar starts at
7:45pm and I have been stuck in a horrific traffic jam for the past 1 1/2 hour,
despite leaving work on the dot. I have never driven to Armada Hotel before,
where the seminar is held, and I am attending it alone. Tough to get someone to
accompany me as most just want to get home and get comfy after work. To attend
a seminar on making multiple sources of income is too stressful. But I was
determined to explore any opportunity that could give me a boost towards
financial freedom.
At 7:30pm, I've arrived at
the seminar venue. The turn-up was good. Mostly young adults, with a scatter of
younger grads and older folks.
The presentor is KC See,
master coach and mentor of the 14 year running Money Mastery Program. I didn't
know who he was. But one thing that immediately caught my interest was that he
learned his stuff from Robert Kiyosaki, DIRECTLY, the man himself. KC See
followed Kiyosaki around for 2 years before setting out on his own. Okay, KC
had a great mentor, better perk up and listen to what he has to say.
If you are interested in
attending this seminar, register by Email to receive your free invitation. Send
your name, mobile number and no. of seat to dctbff@gmail.com
Here are the topics he
covered in the seminar. Some words are his, some are my own thoughts.
1. Revisiting your money
concepts and beliefs-foundations of money making habits.
What is wealth?
Common answers include
'When I'm a millionaire', 'When I own big cars and big houses', 'When I earn
atleast a 5-figure income monthly salary'
Robert Kiyosaki's
defination of wealth:- 'The number of days you can survive forward, maintaining
your current lifestyle, if you quit your job tomorrow'
You are truly wealth when
your answer is FOREVER. Which means you do not need to work if you so wish and
still be able to maintain your lifestyle indefinately because you have multiple
sources of income that churns out money for you.
Our beliefs-foundation of
money making is deeply inculcated in us since young. If your parents believe
that Money is the Root is all Evil, their belief will rub off you. Other
believes include, More money = more stress, less time.
2. Why most people wants Multiple Sources
of Income (MSI) and why most FAIL.
Why most people wants
Multiple Sources of Income is rather apparent right?
We want more money! Okay
there are other reasons too.
Recession risk that looms.
Jobs may be cut. If we do not rely on just ONE source of income, our salary,
but we have multiple sources of income, then losing just one income stream when
we get retrenched will not have much devastating impact.
For me, I want to leave my
9-6 job and still have a substantial income to support my family. To achieve
that, I must start building multiple sources of income now. By the time my
other sources of income surpass my salary, I can call it quit!
Now, the reality. Most
FAIL. Why?
This is actually covered
in the invitation sent out. So I'm just gonna do a cut-n-paste job here.
Fact 1
IN a recent survey of close to 896 people like yourself, we
found that 91.36% of people agree that they should have MSI. However only 23.4
% actually get it done. Why? Intentions are always there but nothing really
matters until you take action. Many just could not get started.
Fact 2
A large number of people who embark on their MSI, went into
income ideas that either does not suit them or does not produce the results
they want. They make wrong choices. They have no guidelines or criteria to help
them make the right decisions. They just listen to their friends and join them.
But what suits their friends does not necessarily suits them.
Fact 3
Some has great ideas but has no template or the necessary
resources or support to help them make it into a real-world income. They end up
frustrated and disenchanted.
Fact 4
Some went to into what seems to be MSI and end up losing money
and losing time.
3. 4 decisions people make in order to
change their financial results.
1st Decision
Must Create Multiple
Source of income
Having ONE source of
income, for most people, their salary, is extremely RISKY.
If your job can be
replaced by a machine or someone else who is willing to take a lower salary, be
very worried.
Even a high-flying career
is threatened when the global economy declines. Something not within our
control. The entire division may be shut down to cut cost. Bond traders
specializing in dried up markets such as Greece
and Italy
find themselves out of job very fast.
Anyone with single income
is at risk. So, we must create multiple source of income. It’s not a
nice-to-have, but a MUST.
2nd Decision
Decide to Make a Change.
Reeducate yourself.
The only thing certain in
life is CHANGE. Change BEFORE you need to. Embrace change with continuous
learning.
3rd Decision
Leverage
R.I.C.E -four (4) building
blocks to income generation.
Leverage is a very
powerful tool to boost our returns. RICE are the factors that we can leverage
on
R- Resources. Time and/or
Money.
I – Ideas
C – Contacts
E – Expertise
This answers to excuses that
we come up with for not having a second income. No time! No money! Don’t know
what to do! No contacts! Don’t know how to do!
We don’t have to do
everything ourselves. LEVERAGE!
4th Decision
Rediscover True Passion
“Find the job you love,
and you will never work a day in your life”
‘Nuff said.
We need to have two types
of income; PASSIVE & PASSION income. Passive income generates money for us
so that we may pursue our passion income. Passion income is something we love
doing so much that we’ll do it even if it pays us nothing. But more often than
not, our passion income produces great results because of our drive and
enthusiasm.
5. What do we need?
1. Community
2. System
3. Mentor/coach
4. Continuous Learning
5. Mastermind Group
6. RICE
7. Regional Support
Take-home points
Most people want
side-income. Or multiple source of income. But most of us do not have them.
Why? Because we never took action to pursue them. Why? 2 top excuses, NO TIME
and NO MONEY. They are really excuses, not valid reasons.
Because,
#1 Everyone
has the same number of hours in a day.
#2 The richest people in the world start
with little money. It's often the lack of money that drives them, not the other
way round.
There are many ways to
build multiple source of income. We don't have to be rich, have a lot of time
or have high education.
If you had read Robert
Kiyosaki's books, you are probably convinced that working hard as an employee
is not the way to go and you need to build your income from the Business and
Investment Quadrants. I read Kiyosaki's books and I understand, but I DON'T
KNOW how to execute the concepts. KC See's Money Mastery course is a practical
hands-on program whereby we are coached on how to execute and build these
multiple sources of income. I find this bit particularly useful because it's
not just about changing your mindset, beliefs, goal setting, etc etc which all
translate into INTENTION. Intention gets us nowhere unless action is taken. The
coaching will whip us up and ensure that we convert our intention into action.
Coaching is up to 2-year by the way. Sufficient to guide us to stand on our
own.
If you are interested in
attending this seminar, register by Email to receive your free invitation. Send
your name, mobile number and no. of seat to dctbff@gmail.com
Next seminar is on 5th
January 2012 (Thursday), 7:45PM at Hilton Hotel, Petaling Jaya.
I’ll update on seminar
schedule and other seminars that they have on this blog.
KLSE FTSE Bursa Malaysia P/E as at 09-Dec-2011
At Closing on 09-Dec-2011
KLCI Index : 1460.13
P/E Ratio : 15.949
KLCI Index : 1460.13
P/E Ratio : 15.949
Thursday, December 8, 2011
KLSE FTSE Bursa Malaysia P/E on 08-Dec-2011
At Closing on 08-Dec-2011
KLCI Index : 1472.92
P/E Ratio : 16.0874
KLCI Index : 1472.92
P/E Ratio : 16.0874
Quick Chat 9-Dec-2011
I have been deliberating over the next stock to cover. So far I've written on Carlsberg and Guinness Anchor Bhd. Both breweries. I really want to get the scoop on Dutch Lady, a stock that I've been eyeing on for almost a year now, but covering yet another consumer defensive stock is kinda boring. So I've decided to do Petronas Dagangan instead. I hope to get the first part up next week.
Current Market Perspective
EU Summit is still on-going but bad news have been leaking out like a bad tap. ECB has reiterated that it will not buy European gov bonds indefinitely. Germany says no to turning ESFS into a banking facility.
It doesn't look like there will be a Santa rally this year end. But then, the market will find a reason if it wants it to happen, even if it is just thin hope.
My Long Views
Europe will dip into recession in 2012 and US will follow suit. We will not be spared here.
Current Market Perspective
EU Summit is still on-going but bad news have been leaking out like a bad tap. ECB has reiterated that it will not buy European gov bonds indefinitely. Germany says no to turning ESFS into a banking facility.
It doesn't look like there will be a Santa rally this year end. But then, the market will find a reason if it wants it to happen, even if it is just thin hope.
My Long Views
Europe will dip into recession in 2012 and US will follow suit. We will not be spared here.
KLSE FTSE Bursa Malaysia P/E on 07-Dec-2011
At Closing on 07-Dec-2011
KLCI Index : 1482.99
P/E Ratio : 16.1969
KLCI Index : 1482.99
P/E Ratio : 16.1969
Wednesday, December 7, 2011
KLSE FTSE Bursa Malaysia P/E on 06-Dec-2011
At Closing on 06-Dec-2011
KLCI Index : 1480.92
P/E Ratio : 16.1732
KLCI Index : 1480.92
P/E Ratio : 16.1732
Tuesday, December 6, 2011
Carlsberg Brewery Malaysia Bhd – Technical Analysis
Trend
Both Long & Short Term Trend is in an Uptrend
Simple Moving Average & MACD & Parabolic SAR
Price is above its 20-Day, 50-Day and 200-Day average,
bullish. 20-Day SMA has crossed 50-Day
SMA.
MACD is also giving bullish signals; blue line crossing the
signal(red) line, both lines are above the 0-mark. MACD bar is green and MACD
line hooking up.
Price is above Parabolic Stop & Reversal, bullish.
Support & Resistance
At 7.61, Carlsberg is trading close to its immediate
resistance line at 7.64. Breaking above this, it may go up to 7.93, a strong
resistance near 52-week high.
Immediate support is at 7.18.
Volume for the past few trading sessions is looking very
healthy too.
Monday, December 5, 2011
Bursa Malaysia KLCI PE Chart
FTSE Bursa Malaysia (KLSE) KLCI 10-year P/E Multiple as at 25-Nov-2011
Source: Public Mutual
KLSE FTSE Bursa Malaysia P/E on 05-Dec-2011
At Closing on 05-Dec-2011
KLCI Index : 1489.95
P/E Ratio : 16.2721
KLCI Index : 1489.95
P/E Ratio : 16.2721
Sunday, December 4, 2011
Carlsberg - Fundamental Analysis
In Carlsberg, The Story ,Carlsberg Brewery Berhad appears to have a more exciting outlook than Guinness Anchor Berhad. Let's see if the figures support the story.
EPS & Revenue Growth
From the divergence of the EPS and Revenue chart lines, we can see that the profit margin of Carlsberg is being squeezed prior to 2009.
Both revenue and profit increased tremendously after the acquisition of Carlsberg Singapore in 2009.
Financial year end of Carlsberg Bhd is 31 Dec.
This is how it has performed this year, 2011.
Q1 Q2 Q3
Revenue 407215 345512 4101661
EPS 16.01 10.15 15.98
EPS for 3 cumulative quarters sums up to 42.14, almost reaching the EPS of Year 2010. Achieving 20% growth in 2011 is at hand.
Gross profit margin in 2010 is 34%, compared to GAB 31%.
ROE at 23% is a big improvement over the previous 8 years of under 20% return on equity.
Carlsberg doesn't have to spend big on Capex, 23mill in 2010. Depreciation is a single digit %.
Free Cash Flow yield (FCF) at 8% is outstanding.
Retained earnings is also building up
2006 2007 2008 2009 2010
323.3 319.1 316.0 363.5 438.2
Gearing
Carlsberg has no long term debt. It has some short term debts tho.
DE ratio 0.6.
At time of writing, 1-Dec-2011,
PE : 17.13
PEG: 1.47
Compared to GAB (I'm using GAB instead of the industry because there are only 2 players!), having PE 18 and PEG >2, Carlsberg share price bodes better with me.
DCF computes a fair value of 8.18 for Carlsberg.
Without thorough analysis of these 2 breweries, I'd have gone for GAB due to personal preference for its beer. Now, I lean towards Carlsberg if I have to choose just one to buy.
EPS & Revenue Growth
From the divergence of the EPS and Revenue chart lines, we can see that the profit margin of Carlsberg is being squeezed prior to 2009.
Both revenue and profit increased tremendously after the acquisition of Carlsberg Singapore in 2009.
Financial year end of Carlsberg Bhd is 31 Dec.
This is how it has performed this year, 2011.
Q1 Q2 Q3
Revenue 407215 345512 4101661
EPS 16.01 10.15 15.98
EPS for 3 cumulative quarters sums up to 42.14, almost reaching the EPS of Year 2010. Achieving 20% growth in 2011 is at hand.
Gross profit margin in 2010 is 34%, compared to GAB 31%.
ROE at 23% is a big improvement over the previous 8 years of under 20% return on equity.
Carlsberg doesn't have to spend big on Capex, 23mill in 2010. Depreciation is a single digit %.
Free Cash Flow yield (FCF) at 8% is outstanding.
Retained earnings is also building up
2006 2007 2008 2009 2010
323.3 319.1 316.0 363.5 438.2
Gearing
Carlsberg has no long term debt. It has some short term debts tho.
DE ratio 0.6.
At time of writing, 1-Dec-2011,
PE : 17.13
PEG: 1.47
Compared to GAB (I'm using GAB instead of the industry because there are only 2 players!), having PE 18 and PEG >2, Carlsberg share price bodes better with me.
DCF computes a fair value of 8.18 for Carlsberg.
Without thorough analysis of these 2 breweries, I'd have gone for GAB due to personal preference for its beer. Now, I lean towards Carlsberg if I have to choose just one to buy.
KLSE FTSE Bursa Malaysia P/E on 02-Dec-2011
At Closing on 02-Dec-2011
KLCI Index : 1489.02
P/E Ratio : 16.2617
KLCI Index : 1489.02
P/E Ratio : 16.2617
Thursday, December 1, 2011
Carlsberg, The Story
There are only 3 listed companies under the sub-sector of Breweries in KLSE/Bursa Malaysia. Guinness Anchor, Carlsberg and the third is a distributor of wine. Napex, which brews Jazz and Starker(served at the very popular Overtime chain of pubs) is not listed.
Since I have covered Guinness Anchor Berhad (GAB) here, here and here, I might as well do it for its strongest competitor. Yea, That Calls for a Carlsberg.
Carlsberg Breweries Berhad is a direct competitor of Guinness Anchor Berhad, for it does the same thing. Brews, markets and distributes beer,stout and shandy. Its product line up is more extensive compared to GAB, which has 10 brands. Carlsberg has more than double.
Beer Brewed Locally
Carlsberg
Skol
Tuborg (Premium Beer)
Stout Brewed Locally
Danish Royal Stout
Connor's (Premium Stout)
Super Premium Beer
Kronenbourg 1664
Imported Beer
Corona
Tetleys
Non-alchoholic Produced Locally
Nutrimalt
Jolly Shandy
By subsidiary
Luen Heng F&B Sdn Bhd
Becks
Budweiser
Crown Lager
Foster's
Franziskaner
Hoegaarden
Lowen Brau
Pure Blonde
Victoria Bitter
Warsteiner
Stella Artois
Leffe
Erdinger
Asahi
By Joint Controlled Entity
Cottingham & Co Ltd (Taiwan)
Beers, spirits, and alcoholic beverage
Beers include lagers, ales, dark beers, wheat beers and stouts.
Brands are Carlsberg,Corona Extra, Erdinger, Guinness, Kronenbourg 1664 and Tetley's
Also distributes Glenfarclas single malt Scotch whisky
By Associate Entity
Lion Brewery (Ceylon) in Sri Lanka
Lion Lager, Carlsberg, Strong Beer, Special Brew and Lion Stout.
Carlsberg Malaysia has presense in countries outside Malaysia unlike GAB which only operates in Malaysia.
Wholly owned subsidiaries of Carlsberg Malaysia are Carlsberg Marketing Sdn Bhd & Carlsberg Singapore Pte Ltd.
Carlsberg Msia has a 70% stake in Luen Heng F&B Sdn Bhd.
Carlsberg Malaysia makes its presense in Taiwan via jointly controlled Entities, Carlsberg Distributors Taiwan Limited ('CDTL') 50% and Carlsberg Cottingham 75%. In Sri Lanka, Carlsberg Malaysia has an investment of 24.6% in Lion Brewery (Ceylon) PLC.
How do these entities contribute to Carlsberg Malaysia Bhd's bottom line?
Operations in Malaysia contributes to 71% of profit. Singapore 29%. And others made a loss of 2 million in 2010.
In term of revenue, Malaysia contributes 76%, Singapore 23% and others 1%.
My discussion hereafter will focus on Carlsberg Malaysia and Singapore.
Mainstream beer accounts for 80% of its revenue. Premium beer, 10% of revenue, will be the segment targetted for growth. 3 years ago, Carlsberg has less than 5% market share in the premium beer segment. Now, Hoegaarden and Kronenbourg have a market share of 20% in premium beer market. MD Soren Ravn expects its premium beers to account for 40% of revenue within the next 3-5 years once Carlsberg starts brewing them in-house. The plan is to brew 2 premium brands in 2012. My guess is Hoegaarden and Kronenbourg. Makes better sense right?
How does brewing premium beer in-house translate into higher earnings?
First, Carlsberg saves on logistics costs. Second, it enjoys an exemption of RM5 per litre on import duty.
By the way, GAB brews Kilkenny locally.
In Oct 2009, Carlsberg Berhad acquired Carlsberg Singapore for 370 million. Carlsberg Singapore has 20% share of the beer and stout market in Singapore. It is at second position after market leader Asia Pacific Breweries (APB) that commands 63% market share. Tiger rocks Singapore. Annual beer consumption per person is 20 litres which is surprisingly the same as Malaysia. I had the impression that Singaporeans party harder and thus guzzle more beer.
The million dollar question... Can Carlsberg Singapore wrestle away some market share from APB? It has doubled its market share from 10% in the 1990s to 20% currently. Garnering more market share is an uphill battle due to strong branding of Tiger in Singapore. Let's just assume Carlsberg Singapore maintains its market share of 20%, Carlsberg Bhd still enjoys some upside of synergy in marketing and better utilization of capacity at its Shah Alam brewery. I'll be keeping an eye on Carlsberg Singapore growth.
Dividend and share price
Carlsberg is a dividend stock. Dividend payout took a beating in 2008 and 2009 due to the acquisition of Carlsberg Singapore, draining its coffers dry. Last year, 2010, gross dividend yield was 4%. And this year, total of 0.555 of dividend has been distributed. Gross yield of 7% at current market price of 7.25. Welcome back to the dividend camp Carlsberg.
CAGR of Carlsberg from 2007-2011 is 14.35%. A little lower than GAB at 19%. But still a fantastic return none the less.The trend of Carlsberg's stock price is somewhat similiar to GAB. Resilient and rising steadily.
Major event in 2012 is the UEFA European Cup, of which the group is the official sponsor. Drink up people.
Like GAB, Carlsberg also faces the problem of increasing costs of raw material, mainly malt which accounts for 30% of total raw material costs. Carlsberg counters by hedging up to 85% of its 2012 malt requirements.
Brewers escaped an excise hike in Budget 2011. But there is still a risk of off-budget duty hike.
However, Carlsberg has been able to pass costs to consumer. A raise of 3-5% in price may happen in year 2012 and is likely not to affect sales.
In Summary
The story on Carlsberg is a tad more interesting than Guinness. Carlsberg sells a wide range of beer. It makes sure there is beer for every segment of consumer out there. Carlsberg has also more potential to increase its profit. First, its plan to brew 2 premium beer in-house. Second, at 20% market share, Carlsberg Singapore has room to grow. In the stout segment, we can forget about Royal Stout. Stout here goes unanimously with Guinness. I favor the story on Carlsberg as there is more to look forward to.
Since I have covered Guinness Anchor Berhad (GAB) here, here and here, I might as well do it for its strongest competitor. Yea, That Calls for a Carlsberg.
Carlsberg Breweries Berhad is a direct competitor of Guinness Anchor Berhad, for it does the same thing. Brews, markets and distributes beer,stout and shandy. Its product line up is more extensive compared to GAB, which has 10 brands. Carlsberg has more than double.
Beer Brewed Locally
Carlsberg
Skol
Tuborg (Premium Beer)
Stout Brewed Locally
Danish Royal Stout
Connor's (Premium Stout)
Super Premium Beer
Kronenbourg 1664
Imported Beer
Corona
Tetleys
Non-alchoholic Produced Locally
Nutrimalt
Jolly Shandy
By subsidiary
Luen Heng F&B Sdn Bhd
Becks
Budweiser
Crown Lager
Foster's
Franziskaner
Hoegaarden
Lowen Brau
Pure Blonde
Victoria Bitter
Warsteiner
Stella Artois
Leffe
Erdinger
Asahi
By Joint Controlled Entity
Cottingham & Co Ltd (Taiwan)
Beers, spirits, and alcoholic beverage
Beers include lagers, ales, dark beers, wheat beers and stouts.
Brands are Carlsberg,Corona Extra, Erdinger, Guinness, Kronenbourg 1664 and Tetley's
Also distributes Glenfarclas single malt Scotch whisky
By Associate Entity
Lion Brewery (Ceylon) in Sri Lanka
Lion Lager, Carlsberg, Strong Beer, Special Brew and Lion Stout.
Carlsberg Malaysia has presense in countries outside Malaysia unlike GAB which only operates in Malaysia.
Wholly owned subsidiaries of Carlsberg Malaysia are Carlsberg Marketing Sdn Bhd & Carlsberg Singapore Pte Ltd.
Carlsberg Msia has a 70% stake in Luen Heng F&B Sdn Bhd.
Carlsberg Malaysia makes its presense in Taiwan via jointly controlled Entities, Carlsberg Distributors Taiwan Limited ('CDTL') 50% and Carlsberg Cottingham 75%. In Sri Lanka, Carlsberg Malaysia has an investment of 24.6% in Lion Brewery (Ceylon) PLC.
How do these entities contribute to Carlsberg Malaysia Bhd's bottom line?
Operations in Malaysia contributes to 71% of profit. Singapore 29%. And others made a loss of 2 million in 2010.
In term of revenue, Malaysia contributes 76%, Singapore 23% and others 1%.
My discussion hereafter will focus on Carlsberg Malaysia and Singapore.
Mainstream beer accounts for 80% of its revenue. Premium beer, 10% of revenue, will be the segment targetted for growth. 3 years ago, Carlsberg has less than 5% market share in the premium beer segment. Now, Hoegaarden and Kronenbourg have a market share of 20% in premium beer market. MD Soren Ravn expects its premium beers to account for 40% of revenue within the next 3-5 years once Carlsberg starts brewing them in-house. The plan is to brew 2 premium brands in 2012. My guess is Hoegaarden and Kronenbourg. Makes better sense right?
How does brewing premium beer in-house translate into higher earnings?
First, Carlsberg saves on logistics costs. Second, it enjoys an exemption of RM5 per litre on import duty.
By the way, GAB brews Kilkenny locally.
In Oct 2009, Carlsberg Berhad acquired Carlsberg Singapore for 370 million. Carlsberg Singapore has 20% share of the beer and stout market in Singapore. It is at second position after market leader Asia Pacific Breweries (APB) that commands 63% market share. Tiger rocks Singapore. Annual beer consumption per person is 20 litres which is surprisingly the same as Malaysia. I had the impression that Singaporeans party harder and thus guzzle more beer.
The million dollar question... Can Carlsberg Singapore wrestle away some market share from APB? It has doubled its market share from 10% in the 1990s to 20% currently. Garnering more market share is an uphill battle due to strong branding of Tiger in Singapore. Let's just assume Carlsberg Singapore maintains its market share of 20%, Carlsberg Bhd still enjoys some upside of synergy in marketing and better utilization of capacity at its Shah Alam brewery. I'll be keeping an eye on Carlsberg Singapore growth.
Dividend and share price
Carlsberg is a dividend stock. Dividend payout took a beating in 2008 and 2009 due to the acquisition of Carlsberg Singapore, draining its coffers dry. Last year, 2010, gross dividend yield was 4%. And this year, total of 0.555 of dividend has been distributed. Gross yield of 7% at current market price of 7.25. Welcome back to the dividend camp Carlsberg.
CAGR of Carlsberg from 2007-2011 is 14.35%. A little lower than GAB at 19%. But still a fantastic return none the less.The trend of Carlsberg's stock price is somewhat similiar to GAB. Resilient and rising steadily.
Major event in 2012 is the UEFA European Cup, of which the group is the official sponsor. Drink up people.
Like GAB, Carlsberg also faces the problem of increasing costs of raw material, mainly malt which accounts for 30% of total raw material costs. Carlsberg counters by hedging up to 85% of its 2012 malt requirements.
Brewers escaped an excise hike in Budget 2011. But there is still a risk of off-budget duty hike.
However, Carlsberg has been able to pass costs to consumer. A raise of 3-5% in price may happen in year 2012 and is likely not to affect sales.
In Summary
The story on Carlsberg is a tad more interesting than Guinness. Carlsberg sells a wide range of beer. It makes sure there is beer for every segment of consumer out there. Carlsberg has also more potential to increase its profit. First, its plan to brew 2 premium beer in-house. Second, at 20% market share, Carlsberg Singapore has room to grow. In the stout segment, we can forget about Royal Stout. Stout here goes unanimously with Guinness. I favor the story on Carlsberg as there is more to look forward to.
KLSE FTSE Bursa Malaysia P/E on 01-Dec-2011
At Closing on 01-Dec-2011
KLCI Index : 1485.26
P/E Ratio : 16.2138
KLCI Index : 1485.26
P/E Ratio : 16.2138
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