► TA SECURITIES
A MEMBER OF THE TA GROUP
RESULTS UPDATE
Monday, August 18, 2025
FBMKLCI: 1,576.34
Sector: Consumer
THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY*
Heineken Malaysia Berhad
Slower Sips in 2Q
TP: RM27.40 (+18.1%)
Last Traded: RM23.20
Liew Yi Jiet
Tel: +603-2167 9602
yjliew@ta.com.my
Review
- Heineken Malaysia Berhad (Heineken) reported core earnings of RM205.3mn for IHFY25, falling short of both our and consensus expectations, representing 41% and 44% of full-year estimates, respectively. The shortfall was primarily due to weaker-than-expected sales amid higher operating costs in 2Q.
- For 2QFY25, revenue contracted by 4.6% YoY to RM539.7mn mainly due to i) the absence of major festive sales and ii) softer demand from the on-trade channels, particularly within the bars. Coupled with weaker sales volume and higher operating expenses incurred from ongoing investments in digital infrastructure and commercial initiatives, quarterly core earnings declined by 8.9% YoY to RM83.0mn, resulting in a lower EBIT margin of 20.5% (-1.0p.p. YoY).
- As a result of softer 2Q earnings, IHFY25 revenue slipped 3.8% YoY to RM1.3bn, while core earnings declined 3.7% YoY to RM205.3mn.
- The group declared a single tier interim dividend of 40.0sen/share, in line with 2QFY24 of 40.0sen/share.
Impact
- We revise our earnings assumptions downward by 9.9%/10.9%/9.8% for FY25/26/27F, following a 7.4% reduction in our sales assumptions across FY25-FY27F.
Outlook
- Management has recently observed a recovery in on-trade demand. Moving into 3Q, we expect the QoQ demand to improve driven mainly by i) robust tourism activities, ii) a gradual recovery in consumer sentiment and early trade replenishment ahead of the price adjustments.
- Given the duopolistic structure of Malaysia’s beer market, dominated by HEIM and Carlsberg, the group is expected to implement a price increase in a similar range of 2-8% as its competitor. While this may dampen volumes in the near term (particularly in 4Q), we believe the demand will normalise over time, supported by the product’s inelastic nature and entrenched consumption habits.
Valuation
- Maintained Buy with a lower TP of RM27.40/share, based on DCF valuation (k: 8.8%, g: 2.1%).
Share Information
| Bloomberg Code | HEIM MK |
| Stock Code | 3255 |
| Listing | Main Market |
| Share Cap (mn) | 302.1 |
| Market Cap (RMmn) | 7,008.7 |
| 52-wk Hi/Lo (RM) | 28.68/22.26 |
| 12-mth Avg Daily Vol (‘000 shrs) | 165.9 |
| Estimated Free Float (%) | 42.8 |
| Beta | 0.2 |
Major Shareholders (%)
| GAPL Pte Ltd | 51.0% |
Forecast Revision
| FY25 | FY26 | |
|---|---|---|
| Forecast Revision (%) | (9.9) | (10.9) |
| Net profit (RMm) | 452.3 | 467.5 |
| Consensus | 471.2 | 491.5 |
| TA’s / Consensus (%) | 96.0 | 95.1 |
| Previous Rating | Buy (Maintained) | |
| Consensus Target Price (RM) | 30.39 | |
Financial Indicators
| FY25 | FY26 | |
|---|---|---|
| Net Debt / Equity (x) | 0.3 | 0.4 |
| CFPS (sen) | 127.3 | 183.4 |
| Price / CFPS (x) | 18.2 | 12.6 |
| ROA (%) | 35.6 | 36.7 |
| NTA/Share (RM) | 1.7 | 1.7 |
| Price/NTA (x) | 13.4 | 13.4 |
Scorecard
| % of FY | ||
|---|---|---|
| vs TA | 41 | Below |
| vs Consensus | 44 | Below |
Share Performance (%)
| Price Change | HEIM | FBM KLCI |
|---|---|---|
| 1 mth | (5.3) | 3.3 |
| 3 mth | (16.6) | 0.2 |
| 6 mth | (15.9) | (1.0) |
| 12 mth | (1.8) | (2.3) |
(12-Mth) Share Price relative to the FBMKLCI
K23.18/23.20K500 x264
6111: HEIM
11 2 9777 9600 Brazil 5511 2995 9000 Europe 44 20 7230 7500 Germany 49 69 9204 1210 Hong Kong ess
6212 1000 746151 HKT GIFT2:00 ba1195-172 15-Aug-2025 19-20-29
Source: Bloomberg
Table 1: Earnings Summary (RM’mn)
| FYE December (RM’mn) | 2023 | 2024 | 2025E | 2026F | 2027F | |
|---|---|---|---|---|---|---|
| Revenue | 2,637.7 | 2,796.8 | 2,768.3 | 2,823.9 | 2,880.7 | |
| EBITDA | 587.6 | 681.0 | 685.7 | 708.7 | 732.8 | |
| Pretax Profit | 510.9 | 584.3 | 595.2 | 615.1 | 640.4 | |
| Reported Net Profit | 386.8 | 466.7 | 452.3 | 467.5 | 486.7 | |
| Core Net Profit | 386.8 | 466.7 | 452.3 | 467.5 | 486.7 | |
| Core EPS | (sen) | 128.0 | 154.5 | 149.7 | 154.7 | 161.1 |
| Core PER | (x) | 18.1 | 15.0 | 15.5 | 15.0 | 14.4 |
| DPS | (sen) | 128.0 | 155.0 | 149.7 | 154.7 | 161.1 |
| Dividend Yield | (%) | 5.5 | 6.7 | 6.5 | 6.7 | 6.9 |
Table 2: 2QFY25 Results Analysis (RM’mn)
| FYE December | 2QFY24 | 1QFY25 | 2QFY25 | QoQ (%) | YoY (%) | IHFY24 | IHFY25 | YoY (%) |
|---|---|---|---|---|---|---|---|---|
| Revenue | 565.5 | 763.6 | 539.7 | (29.3) | (4.6) | 1,354.7 | 1,303.4 | (3.8) |
| EBITDA | 138.2 | 190.8 | 130.5 | (31.6) | (5.5) | 330.6 | 321.6 | (2.7) |
| Depreciation & Amortisation | (16.5) | (26.8) | (19.9) | 25.7 | (20.8) | (43.7) | (46.8) | (7.0) |
| EBIT | 121.7 | 164.0 | 110.6 | (32.6) | (9.1) | 286.9 | 274.8 | (4.2) |
| Net Finance Cost | (1.7) | (3.1) | (1.2) | 60.7 | 29.2 | (6.0) | (4.3) | 28.0 |
| EI | 0.0 | 0.0 | 0.0 | – | – | 0.0 | 0.0 | – |
| PBT | 120.0 | 160.9 | 109.4 | (32.0) | (8.8) | 281.0 | 270.5 | (3.7) |
| Adj PBT | 120.0 | 160.9 | 109.4 | (32.0) | (8.8) | 281.0 | 270.5 | (3.7) |
| Tax | (28.9) | (38.8) | (26.4) | 31.9 | 8.5 | (67.7) | (65.2) | 3.6 |
| MI | 0.0 | 0.0 | 0.0 | – | – | 0.0 | 0.0 | – |
| Net Profit | 91.1 | 122.2 | 83.0 | (32.1) | (8.9) | 213.3 | 205.3 | (3.7) |
| Core Profit | 91.1 | 122.2 | 83.0 | (32.1) | (8.9) | 213.3 | 205.3 | (3.7) |
| EPS (Sen) | 30.2 | 40.4 | 27.5 | (32.1) | (8.9) | 70.7 | 67.9 | (4.0) |
| DPS (Sen) | 40.0 | 0.0 | 40.0 | nm | 0.0 | 40.0 | 40.0 | 0.0 |
Margins
| %-points | %-points | |||||||
|---|---|---|---|---|---|---|---|---|
| EBITDA Margin (%) | 24.4 | 25.0 | 24.2 | (0.8) | (0.3) | 24.4 | 24.7 | 0.3 |
| EBIT Margin (%) | 21.5 | 21.5 | 20.5 | (1.0) | (1.0) | 21.2 | 21.1 | (0.1) |
| PBT Margin (%) | 21.2 | 21.1 | 20.3 | (0.8) | (0.9) | 20.7 | 20.8 | 0.0 |
| Tax Rate (%) | 24.1 | 24.1 | 24.1 | 0.0 | 0.1 | 24.1 | 24.1 | 0.0 |
| Net Margin (%) | 16.1 | 16.0 | 15.4 | (0.6) | (0.7) | 15.7 | 15.8 | 0.0 |
Table 3: Valuation Method
| DCF Valuation | |
|---|---|
| Rf | 3.8% |
| Rm | 10.0% |
| Beta | 0.80 |
| CAPM | 8.8% |
| Total NPV (RM mn) | 8,049.7 |
| Share Outstanding (mn share) | 302.1 |
| FCFE/share | 26.60 |
| (+) ESG Premium: 3% | 0.80 |
| FCFE/share | 27.40 |
Stock Recommendation Guideline
OVERWEIGHT: The total return of the sector, as per our coverage universe, exceeds 12%.
NEUTRAL: The total return of the sector, as per our coverage universe, is within the range of 7% to12%.
UNDERWEIGHT: The total return of the sector, as per our coverage universe, is lower than 7%.
Stock Recommendation Guideline
BUY : Total return of the stock exceeds 12%.
HOLD : Total return of the stock is within the range of 7% to 12%.
SELL : Total return of the stock is lower than 7%.
Not Rated: The company is not under coverage, the report is for information only.
Total Return of the stock includes expected share price appreciation, adjustment for ESG rating and gross dividend. Gross dividend is excluded from Total Return if dividend discount model valuation is used to avoid double counting.
Total Return of the sector is market capitalisation weighted average of total return of the stocks in the sector.
ESG Scoring & Guideline
| Scoring | Environmental | Social | Governance | Average |
|---|---|---|---|---|
| ★★★★★ | High conviction in reducing carbon footprint, water waste and encourages recycling. It has sustainable supply-side as well as sustainable sourcing and reduce carbon footprint. | Although alcoholism is often considered a social issues Heineken is an advocator of responsible consumption amongst audiences with proper product information and encourage no-drink driving. | The board is represented by 43% independent directors. Main representative from Heineken’s Germany and clearly promote diversity. Heineken frequently distributes dividend with ~100% payout. | ★★★★★ |
| ★★★★★ (≥80%) | Displayed market leading capabilities in integrating ESG factors in all aspects of operations, management and future directions. | +5% premium to target price | ||
| ★★★★ (60-79%) | Above adequate integration of ESG factors into most aspects of operations, management and future directions. | +3% premium to target price | ||
| ★★★ (40-59%) | Adequate integration of ESG factors into operations, management and future directions. | No changes to target price | ||
| ★★ (20-39%) | Needs some integration of ESG factors in operations and management but are insufficient. | -3% discount to target price | ||
| ★ (<20%) | Minimal or no integration of ESG factors in operations and management. | -5% discount to target price | ||
Disclaimer
The information in this report has been obtained from sources believed to be reliable. Its accuracy and/ or completeness is not guaranteed and opinions are subject to change without notice. This report is for information only and not to be construed as an offer or solicitation for the subscription or purchase of any direct or indirect loss arising from the use of this document. We, our associates, directors, employees may have an interest in the securities and/or companies mentioned herein.
As of Monday, August 18, 2025, the analyst(s) Liew Yi Jiet, who prepared this report, has interest in the following securities covered in this report:
(Nil)
Kaladher Govindan – Head of Research
TA SECURITIES HOLDINGS BERHAD (197301005167 (14948-M))
A Participating Organisation of Bursa Malaysia Securities Berhad
Menara TA One | 22 Jalan P. Ramlee | 50250 Kuala Lumpur | Malaysia | Tel: 603 – 2072 1277 | Fax: 603 – 2032 5048
Page 1 of 3
