Towards Financial Freedom
SUPER GROUP - Lift from better margins
Super's recurring 2Q12 net profit of S$17.3m (+31% y-o-y; +2% q-o-q) was above our S$15.7m projection largely due to better-than-expected gross profit margin of 36% (our estimate: 34%) and lower tax rate of 6% (our estimate: 10%). However, revenue dipped 2% to S$112m (our estimate: S$117m) on lower contribution from ingredient sales. We are maintaining our estimates given that the positive impact from a good set of 2Q12 results would likely be mitigated by current high raw material prices. Maintain NEUTRAL at TP of S$2.12, pegged to 15x blended FY13-14f PER
2Q12 revenue came in below expectation. Revenue was S$5m below our expectation due to branded consumer sales coming in flat at S$84m (our estimate: S$88m). The division saw lower salesinto Thailand as a result of a difference in timing for promotional activities (as these were brought forward to 1H11 due to 2011 election), which was partially offset by growth in sales from other regional markets e.g. Malaysia and Philippines.
Spike in Robusta bean prices since May12. Coffee bean prices have hovered around their highs of US$2,200/tonne since May12. We estimate 3Q12 input costs to be ~US$2,100/tonne, higher than ~US$1,900/tonne for 1Q12. Sugar prices rebounded to ~US$600/tonne and palm oil prices were stable at ~US$1,000/tonne in Jul12 (YTD12: US$600 and US$1,000 respectively).
Fine-tuning estimates. We take into consideration the good set of 2012 results and current high raw material prices, and note that their net impact are immaterial ' at less than 1% to our previous estimates. We now expect 3Q-4Q12 quarterly earnings of S$17m-S$17m (previously S$16m-S$19m) respectively.
Key risks. Upside potential to our NEUTRAL call includes better margins from an improved product mix and higher dividend payout ratios. Downside risks include sharp spike in input prices i.e. Robusta coffee beans, palm oil and sugar.
Source: OSK
2Q12 revenue came in below expectation. Revenue was S$5m below our expectation due to branded consumer sales coming in flat at S$84m (our estimate: S$88m). The division saw lower salesinto Thailand as a result of a difference in timing for promotional activities (as these were brought forward to 1H11 due to 2011 election), which was partially offset by growth in sales from other regional markets e.g. Malaysia and Philippines.
Spike in Robusta bean prices since May12. Coffee bean prices have hovered around their highs of US$2,200/tonne since May12. We estimate 3Q12 input costs to be ~US$2,100/tonne, higher than ~US$1,900/tonne for 1Q12. Sugar prices rebounded to ~US$600/tonne and palm oil prices were stable at ~US$1,000/tonne in Jul12 (YTD12: US$600 and US$1,000 respectively).
Fine-tuning estimates. We take into consideration the good set of 2012 results and current high raw material prices, and note that their net impact are immaterial ' at less than 1% to our previous estimates. We now expect 3Q-4Q12 quarterly earnings of S$17m-S$17m (previously S$16m-S$19m) respectively.
Key risks. Upside potential to our NEUTRAL call includes better margins from an improved product mix and higher dividend payout ratios. Downside risks include sharp spike in input prices i.e. Robusta coffee beans, palm oil and sugar.
Source: OSK
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
