- Net pro't grew 47% YoY on expanded gross margins. 1H earnings of S$36.6mil already met 47% of our full year estimates, despite a seasonally slower 1H. The strong results underscores our con'dence in the earnings potential of Super, which is founded on sales growth with expanding margins from lower commodity prices. In 2Q 2012, gross margins expanded by 4.1 percentage points YoY to 35.6%, thanks to lower robusta co'ee bean and sugar prices.

- 1H 2012 Branded Consumer sales up 6% YoY.  Sales growth continued to be strong, particularly driven by  markets in Malaysia, the Philippines and Myanmar.    2Q YoY sales growth was 'a''sh, as 2Q 2011 was exceptionally strong due to the bringing forward of A&P activities in Thailand in 2Q ahead of the elections. We expect sales in Thailand to get stronger towards the end of this year, based on Super's A&P activities.

- 1H 2012 Ingredient sales grew 22% YoY, on higher  processing capacity.  Sales of non'dairy creamer (NDC) to China was stronger, due to larger NDC capacity meeting high demand from China. East Asia sales now account for 38% of total ingredient sales, and South East Asia 62%.

- 2c interim dividend  declared for 1HFY12.  Super Group declared 2c, or circa 30% of 1H earnings, as dividends. DPS is comparable to 1HFY11. On last close, annualized dividend yield is  less than 1%.

- Maintain BUY with FV of S$2.70. Super's strong 1H results strongly suggests it is on track to meet or exceed our full year earnings estimates. We continue to value Super at 20x EPS of $0.135, deriving a fair value of S$2.70. Despite a recent surge in Super's share price, our FV   still implies an over 20% of capital gains potential from current levels.    Super is currently trading at only 16x forward PER, which is cheap given its brand value (top 3 in Asia by volume). BUY.

Source: AmFraser