KUALA LUMPUR: Kenanga Research maintained market perform on Carlsberg Brewery Malaysia Bhd with a higher target price of RM18.25 following a slightly better net earnings adjustment.The research house said Carlsberg's 1Q18 profit after tax, amortisation and minority interests of RM76.1mil and a dividend of 20 sen declared was within expectations.On year, Kenanga notes that 3M18 revenue grew 12% to RM548.5mil as domestic sales received a boost from a later CNY period and less forward purchases as compared to CNY 2017.Singapore sales declined 8% as spending may be dampened by anticipated tightening of fiscal policies and currency depreciation, it said.Associate company Lion Brewery progressively recovered post-flood. with RM5.6mil in contribution.Kenanga Research said expansion in Malaysian demand is likely to carry on for most parts of this year as spending could pick up from zeroing of GST, the 2018 World Cup and an earlier CNY 2019 season, which could result in forward buying.It said the encouraging growth from premium cariants could be a boon to earnings in the near term while the softening Singapore market could be worsened by the strengthening ringgit. "While associate Lion Brewery is thought to have begun commissioning its factory in 2H17, we believe more time would be required for it to regain its sales order and optimise production levels to contribute meaningfully to the group," it added.

Source: The Star May 18, 2018 00:56 UTC