Petronas Dagangan is the principal domestic marketing arm of Petroliam Nasional Berhad (PETRONAS) for downstream petroleum products. Think Petronas gas stations,Kedai Mesra and the cooking gas cylinders in the kitchen.
Retail (50%) and Commercial business(31%) contributes 81% of Petdag's net margin.
Retail is the key business, contributing almost 50% of group's net margin.
Retail market share maintained at 32%.
995 service stations. 617 Kedai Mesra. 22 new service stations in FYE2011.
Plans to continue expanding service station network as it aims to take market leadership.
Non-fuel income, Kedai Mesra, increased 14% from last year.
Commercial Business’market leadership of more than 60%. Contributes 31% of Petdag's net margin.
Commercial Business sales volume grew 3.8%. Prominent in aviation sector.
Dominant market share of 70% at KLIA and other major airports.
Market leader in LPG (50.7%)
Lubricant market share 22%.
Sale volume improved by 9%.Partnership deals with Proton Edar, Naza Chevrolet, Cycle & Carriage and Perodua to supply lubricants.
Growth in FYE2011
Retail- Maintain
Commercial -3.8%
Lubricants - 9%
LPG - 2%
Management has the ambition to take market leadership in 2-5 years time.
How?
Improve service in retail arm.
For commercial business, concentrating on new opportunities coming out of the economic development corridors under the 10th Malaysia Plan and the government’s Economic Transformation Programmes (ETPs).
For LPG, which is matured market, Petdag will include innovative marketing and tighter cost control.
Petdag took a hit in 2009, effects from the Great Recession; earnings declined as much as 12%. The oncoming global recession 2012 doesn't bode well with this stock. The commercial chunk contributes quite significantly to Petdag's bottomline. Aviation isn't gonna take off to high grounds in such gloomy economy. The best outcome is very slow growth in the US. Recession is already a sure thing in Europe.
Moreover, Petdag at 17.20 is rather over-valued. It factors in high growth rate which I don't think is achievable under such unfavorable economic conditions.
The growth story by the management doesn't even jump at you. Nothing major happening. Just improving services and operations.
Overall, I like Petdag, but not at its current valuation.
Update, 30-Jan-2012
http://www.theedgemalaysia.com/highlights/200078-2012-ceo-outlook-series-pdb-to-boost-presence-beyond-msia.html
In 2012, Petdag will explore growth beyond Malaysia, starting with regional opportunities that will complement commercial goals.
Showing posts with label The Story. Show all posts
Showing posts with label The Story. Show all posts
Monday, January 9, 2012
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.
Monday, November 21, 2011
Guinness Anchor Berhad, GAB - The Story
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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