PETALING JAYA: Carlsberg Brewery Malaysia Bhd
is poised for a strong finish to its financial year ending Dec 31, 2024 (FY24), driven by festive spending and higher consumer demand.
Analysts remain optimistic about the company’s prospects, expecting higher sales volumes in its fourth quarter ending Dec 31, 2024 (4Q24), particularly due to the upcoming Christmas season and the earlier Chinese New Year (CNY) in 2025.
TA Research expects Carlsberg to benefit from seasonal demand in 4Q24, which will likely drive out-of-home consumption.
“In the upcoming quarter, we expect the on-trade channel to remain resilient, especially with Christmas and year-end activities, which could boost out-of-home consumption,” the research house noted.
Similarly, UOB Kay Hian (UOBKH) Research anticipates Carlsberg to see an uptick in 4Q24 revenue, supported by higher sell-in volumes due to the earlier CNY celebration next year and its continuous premiumisation push.
The brokerage pointed out that year-to-date, Carlsberg has launched two premium lager beers.
“However, net profit margins should be relatively muted in 4Q24 with its continued investments into the brands, especially the investment required for Sapporo due to stronger competition for Japanese beer in Singapore,” it noted.
Nevertheless, UOBKH Research expects margins to sequentially pick up in 2025 thanks to premiumisation, productivity gains and prudent cost management.
Meanwhile, Maybank Investment Bank (Maybank IB) Research raised its earnings estimates for Carlsberg, citing continued sales momentum.
The research firm lifted its earnings estimates for FY24, FY25 and FY26 by 11%, 9% and 9%, respectively.
“We expect positive sales momentum to continue into 4Q24 with higher festive-led spending, along with added volume from earlier CNY preparations,” the brokerage said.
However, Maybank IB Research cautioned that higher advertising and promotional expenses during the upcoming festive seasons could lead to softer quarter- on-quarter earnings.
While concurring that Carlsberg’s 4Q24 performance should see a boost from the earlier timing of the CNY in 2025, RHB Research warned that beyond the immediate term, growth may be tempered by cautious consumer sentiment driven by inflationary pressures.
The research house said Carlsberg’s premiumisation strategy and planned price increases are vital to sustaining earnings growth.
“We expect Carlsberg to remain focused on driving operational efficiency and stimulating consumer spending with strategic marketing engagements as well as new product launches,” it added.
In 3Q24, Carlsberg saw a 6% decline in its Singapore operations due to lower premium sales arising from the transition of the Asahi brand to Sapporo.
Commenting on this, TA Research said demand in Singapore will gradually recover, driven by higher tourist arrivals and increased brand awareness of Sapporo.
TA Research, which made no changes to its earnings projections, reiterated its “buy” call on Carlsberg, maintaining its target price (TP) at RM24.10 per share.
UOBKH Research also maintained its “buy” call, with an unchanged TP of RM25.10 a share.
Both Maybank IB Research and RHB Research raised their TPs for Carlsberg to RM23.10 – from RM21 and RM22.20, respectively – while keeping their “buy” calls on the stock.
