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A MEMBER OF THE TA GROUP
RESULTS UPDATE
Wednesday, August 13, 2025
FBMKLCI: 1,567.90
Sector: Consumer
THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY*
Carlsberg Brewery Malaysia Berhad
Tax Tailwind Keeps Carlsberg Earnings Effervescent
TP: RM24.10 (+39.5%)
Buy (ESG: ★★★★)
Last Traded: RM17.28
Review
- Carlsberg Brewery Malaysia Berhad’s (Carlsberg) 2QFY25 results were in line with expectations. IHFY25 core earnings of RM176.5mn represented 49% of our full-year estimate and 48% of consensus.
- IHFY25 core earnings rose 5.4% YoY despite a weaker turnover of RM1.2bn (-6.5% YoY). The earnings growth was mainly driven by a lower effective tax rate of 22.0% (-5.4%-pts YoY), due to the absence of additional deferred tax liabilities from foreign withholding tax on its Sri Lanka associate, which were recognised in IHFY24.
- Malaysia. In 2QFY25, EBIT and revenue rose 4.9% YoY and 1.5% YoY to RM80.7mn and RM369.4mn, respectively. The improvement was primarily attributed to a low base in 2QFY24, which was affected by early stockpiling in 1QFY24 ahead of the April 2024 price adjustment. Cumulatively, 1HFY25 revenue fell 6.1% YoY to RM850.0mn, reflecting the front-loading of CNY sales into 4QFY24 and softer consumer sentiment. Nevertheless, EBIT grew 2.7% YoY to RM187.0mn, supported by lower operating expenses in 1H.
- Singapore. Quarterly revenue and EBIT declined by 15.9% YoY and 28.5% YoY to RM120.8mn and RM14.6mn, respectively, mainly due to softer on-trade performance and the appreciation of the Ringgit Malaysia against the Singapore Dollar. Following the weaker 2Q results, 1HFY25 revenue fell 11.9% YoY to RM289.0mn, while EBIT plunged 31.9% YoY to RM24.9mn.
- The group declared a second interim dividend of 20.0sen/share for 2QFY25, bringing YTD dividends to 43.0sen/share (1HFY24: 42.0sen).
Impact
- No changes to our earnings forecasts.
Outlook
- We anticipate a QoQ improvement in 3QFY25 sales, driven by early stockpiling ahead of the upcoming price adjustment of approximately 2-8% in September 2025. We believe the price hikes would mitigate the impact of an expected 3% decline in sales volume for FY25, largely attributed to the absence of pre-Chinese New Year stockpiling and softer festive demand.
- Management guided that Singapore operations are likely to remain subdued in FY25, amid persistent pricing pressure. However, a recovery is expected in FY26 as the market gradually stabilises.
Valuation
- We maintain our Buy call with an unchanged target price of RM24.10/share, based on a DCF valuation (k: 7.8%, g: 2.4%).
Share Information
| Bloomberg Code | CAB MK |
| Stock Code | 2836 |
| Listing | Main Market |
| Share Cap (mn) | 305.7 |
| Market Cap (RMmn) | 5283.3 |
| 52-wk Hi/Lo (RM) | 21.2/17.24 |
| 12-mth Avg Daily Vol (‘000 shrs) | 140.9 |
| Estimated Free Float (%) | 46.1 |
| Beta | 0.3 |
| Major Shareholders (%) | |
| Carlsberg Asia Pte Ltd – 51.0% | |
Forecast Revision
| FY25 | FY26 | |
|---|---|---|
| Forecast Revision (%) | 0.0 | 0.0 |
| Net profit (RMm) | 360.6 | 397.2 |
| Consensus | 365.0 | 383.5 |
| TA’s / Consensus (%) | 99 | 104 |
| Previous Rating | Buy (Maintained) | |
| Consensus Target Price (RM) | 24.52 | |
Financial Indicators
| FY25 | FY26 | |
|---|---|---|
| Net Debt / Equity (x) | Net Cash | 0.1 |
| CFPS (sen) | 136.2 | 143.8 |
| Price / CFPS (x) | 12.7 | 12.0 |
| ROA (%) | 30.3 | 31.6 |
| NTA/Share (RM) | 0.9 | 0.9 |
| Price/NTA (x) | 19.7 | 19.5 |
Scorecard
| % of FY | ||
|---|---|---|
| vs TA | 49 | Within |
| vs Consensus | 48 | Within |
Share Performance (%)
| Price Change | CARLSBG | FBM KLCI |
|---|---|---|
| 1 mth | (8.9) | 2.1 |
| 3 mth | (10.2) | 1.4 |
| 6 mth | (14.7) | (2.2) |
| 12 mth | (6.1) | (2.4) |
(12-Mth) Share Price relative to the FBMKLCI
Source: Bloomberg
Table 1: Valuation Method
| DCF Valuation | |
|---|---|
| Rf | 3.8% |
| Rm | 9.5% |
| Beta | 0.7 |
| Discount Rate | 7.8% |
| Total NPV (RM mn) | 7,141.8 |
| Share Outstanding (mn share) | 305.7 |
| FCFE/share | 23.40 |
| (+) ESG Premium: 3% | 0.70 |
| FCFE/share | 24.10 |
Table 2: 2QFY25 Results Analysis (RM’mn)
| FYE Dec | 2QFY24 | 1QFY25 | 2QFY25 | QoQ (%) | YoY (%) | 1HFY24 | 1HFY25 | YoY (%) |
|---|---|---|---|---|---|---|---|---|
| Revenue | 507.5 | 662.8 | 490.2 | (26.0) | (3.4) | 1,233.2 | 1,153.0 | (6.5) |
| -> Malaysia | 363.9 | 480.7 | 369.4 | (23.1) | 1.5 | 905.2 | 850.0 | (6.1) |
| -> Singapore | 143.6 | 168.2 | 120.8 | (28.2) | (15.9) | 328.0 | 289.0 | (11.9) |
| EBIT | 97.5 | 116.7 | 95.2 | (18.4) | (2.3) | 218.6 | 211.9 | (3.0) |
| -> Malaysia | 76.9 | 105.6 | 80.7 | (23.6) | 4.9 | 182.0 | 187.0 | 2.7 |
| -> Singapore | 20.4 | 10.4 | 14.6 | 40.2 | (28.5) | 36.6 | 24.9 | (31.9) |
| Depreciation & Amortisation | (18.5) | (18.3) | (17.9) | 2.3 | 3.3 | (36.9) | (36.2) | 1.7 |
| Associates | 8.3 | 6.8 | 9.1 | 34.8 | 10.2 | 15.8 | 15.9 | 0.5 |
| Profit Before Tax (PBT) | 105.4 | 122.6 | 104.4 | (14.8) | (0.9) | 232.8 | 227.0 | (2.5) |
| Taxation | (25.0) | (27.8) | (22.2) | 20.0 | 11.2 | (63.9) | (50.0) | 21.7 |
| Minority Interest (MI) | (1.0) | (0.3) | (0.3) | 4.3 | 72.4 | (1.6) | (0.5) | 66.8 |
| Net Profit | 79.4 | 94.5 | 81.9 | (13.3) | 3.2 | 167.3 | 176.5 | 5.4 |
| Core Profit | 79.4 | 94.5 | 81.9 | (13.3) | 3.2 | 167.3 | 176.5 | 5.4 |
| EPS (sen) | 26.0 | 30.9 | 26.8 | (13.3) | 3.2 | 54.7 | 57.7 | 5.4 |
| DPS (sen) | 20.0 | 23.0 | 20.0 | (13.0) | 0.0 | 42.0 | 43.0 | 2.4 |
| Margins | %-pts | %-pts | %-pts | |||||
| EBIT Margin (%) | 19.2 | 17.6 | 19.4 | 1.8 | 0.2 | 17.7 | 18.4 | 0.7 |
| -> Malaysia | 21.1 | 22.0 | 21.8 | (0.1) | 0.7 | 20.1 | 22.0 | 1.9 |
| -> Singapore | 14.2 | 6.2 | 12.0 | 5.9 | (2.1) | 11.2 | 8.6 | (2.5) |
| PBT Margin (%) | 20.8 | 18.5 | 21.3 | 2.8 | 0.5 | 18.9 | 19.7 | 0.8 |
| Tax Rate (%) | 23.7 | 22.7 | 21.3 | (1.4) | (2.5) | 27.4 | 22.0 | (5.4) |
| Net Profit Margin (%) | 15.6 | 14.3 | 16.7 | 2.5 | 1.1 | 13.6 | 15.3 | 1.7 |
| Core Profit Margin (%) | 15.6 | 14.3 | 16.7 | 2.5 | 1.1 | 13.6 | 15.3 | 1.7 |
Table 3: Earnings Summary (RM’mn)
| FYE December (RM’mn) | FY23 | FY24 | FY25E | FY26F | FY27F |
|---|---|---|---|---|---|
| Revenue | 2,260.9 | 2,376.4 | 2,464.2 | 2,614.3 | 2,754.9 |
| EBITDA | 461.3 | 469.2 | 504.9 | 554.5 | 597.0 |
| PBT | 417.1 | 448.3 | 475.2 | 527.6 | 566.6 |
| Reported Net Profit | 327.3 | 337.1 | 360.6 | 397.2 | 421.6 |
| Core Net Profit | 322.8 | 330.2 | 360.6 | 397.2 | 421.6 |
| Core EPS (sen) | 105.6 | 108.0 | 117.9 | 129.9 | 137.9 |
| Core PER (x) | 16.4 | 16.0 | 14.7 | 13.3 | 12.5 |
| DPS (sen) | 93.0 | 100.0 | 117.9 | 129.9 | 137.9 |
| Dividend Yield (%) | 5.4 | 5.8 | 6.8 | 7.5 | 8.0 |
Recommendation Guidelines
Sector 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% to 12%.
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
Environmental
High conviction in reducing carbon footprint, water waste and switching to usage of renewable energy. Global partnership with suppliers to drive sustainable sourcing and reduce carbon footprint.
Social
Although alcoholism is often associated to social issues, Carlsberg is an advocator of responsible consumption; reaching audiences with proper product information and encourage no-drink driving.
Governance
The board is represented by 43% independent directors (with representative from Carlsberg’s parent company) and decent gender diversity. Carlsberg has targeted dividend payout of 100%.
Average
★★★★★ (≥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%): Have 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
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