Full year PATMI grew 27.7% YoY on stronger sales and gross margins. Super delivered S$79.0mil of PATMI in FY2012, exceeding our estimates of S$75.2mil by 5.1%. Between the two segments Branded Consumer (BC) and Food Ingredients (FI), the latter delivered a stronger growth (but from a lower base) and now contributes 32% to total revenues, up from 28% a year ago. BC sales grew 11.5% to S$355.1mil in FY2012, while FIsales grew 34.2% to S$164.1mil. In addition, Super declared a full year DPS of 7.1c,representing 1.9% yield based on last close.


Brand‐building initiatives continue. As part of brand‐building and in a bid to engage the younger crowd, the
"Super" brand was given a new look, logo and identity earlier in January 2013. Based on management feedback and observation, we believe the new brand is well‐received. In the meantime, Super continues to roll out new products, as part of innovation and to create demand for new tastes. 2 new products can be expected in 2013-the 3‐in‐1 Brown Sugar Coffee and the Roasted Hazelnut White Coffee.


Increased capacity in Food Ingredients. The new freeze‐dry coffee production line with an annual capacity of
1,500mt has been completed in Jan 2013, and will contribute to the group's results on a near full‐year basis.
Due to overwhelming demand for its spray‐dried coffee, Super has increased the annual capacity by 50% to
15,000mt. On the other hand, the Botanical Herbal Extract production plant will only be completed by Dec
2013, and contributing to the group's results in 2014.


Maintain BUY, upgrade FV from S$3.34 to S$4.37. We now raise our EPS estimates for FY13F to S$0.182 from previous estimates of S$0.167, on higher sales growth projections. We view the recent surge in Super's share price of 35% since our previous update as a result of a major re‐rating of the consumer sector in the recent months. We now value Super at 24x FY13F EPS of $0.182, deriving a fair value of S$4.37. We continue to favour Super for 1) its exposure to growth in emerging markets; 2) its strong financial position - it currently has cash of S$112.2mil with no debt and 3) its brand value - one of
top 3 brands in Asia. BUY.

Source: AmFraser