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报告摘要

Super Group (SUPER SP) Summary

Core Content and Key Information

Super Group (SUPER SP) is a Singapore-based company in the Consumer Staples sector, with a share price of SGD1.45 and a target price of SGD1.18 (a -18% decrease). The company has a market capitalization of USD1.3B and an average daily trading volume (ADTV) of USD2M. The stock has been downgraded to SELL due to several headwinds, including rising selling & distribution costs, higher tax rates, and currency weakness.

The EPS for FY14E-16E has been cut by 14-17%, with the new target price based on a 15x FY15E P/E, which is the company's 5-year mean. This contrasts with its previous valuation of 20x FY14E EPS.

Main Points and Views

Poor Performance in Core Markets:
Super is struggling to regain growth in two of its four core markets: Myanmar and Malaysia. In Myanmar, sales declined due to a 6% price discount to the distributor and increased competition. In Malaysia, the rebranding of Nutremill led to confusion among consumers, affecting sales. The Philippines market is also stagnating, with strong local competition making it difficult for Super to gain traction.
Revenue and Profit Decline:
In 2Q14, revenue fell by 5% YoY, and PATMI dropped by 59% YoY to SGD15m. Even after adjusting for a SGD17m gain from the sale of an associate in 2Q13, net profit fell by 27% YoY. The 1H14 PATMI of SGD32.8m was only 40% of the market's FY14E forecast and 37.3% of the former forecast.
Costs and Taxation Headwinds:
Selling & distribution costs are expected to increase from 10-12% to 12-15%. In Malaysia, the expiry of pioneer status for its soluble-coffee plant will lead to a tax rate increase from 10-12% to 12-15%. These factors will likely pressure profitability.
Positive in Some Markets:
Thailand showed slight recovery in volume in 2Q14, although baht weakness affected revenue. China saw a 35% YoY revenue jump due to focus on coffee and healthy beverages.
Financial Ratios:
- Core P/E is at 18.4x for FY15E, down from 22.0x for FY12A.
- P/BV has decreased from 4.0x to 3.1x.
- ROAE and ROAA have declined over the years, indicating a decline in profitability.
- Free cash flow yield has increased from 1.4% to 3.6%.
Share Price Performance:
The share price has declined by 39.7% over the past 12 months. The relative performance to the index has also been negative.

Key Data Summary

Metric	FY12A	FY13A	FY14E	FY15E	FY16E
Revenue (SGD m)	519.3	557.0	562.1	624.9	710.8
EBITDA (SGD m)	101.4	131.9	102.1	112.6	125.1
Core Net Profit (SGD m)	79.0	83.9	73.1	87.4	97.9
Core FDEPS (cts)	7.1	7.5	6.6	7.8	8.8
Core FD P/E (x)	20.4	19.2	22.0	18.4	16.5
P/BV (x)	4.0	3.5	3.3	3.1	2.8
Net Dividend Yield (%)	2.5	3.1	3.1	3.1	3.1
EV/EBITDA (x)	16.9	15.5	15.1	13.5	12.0

Market Performance by Region

Market	Est % of group revenue	Est % of BC revenue	2Q14 Performance	Outlook	Prognosis
Thailand	19.0%	30.0%	Volume slightly recovered QoQ, but revenue dragged down by baht weakness	Expand distribution to northern and central Thailand, launch new healthier products	Positive in short term, but risk of further baht weakness and political turmoil
Myanmar	13.0%	20.0%	Single-digit decline in 1Q14, accelerated to double digits in 2Q14	Defend market share with multi-brand strategy	Negative
Malaysia	8.0%	13.0%	Revenue fell QoQ due to rebranding confusion	Rebranding may yield better results in the long term	Negative in short term
Singapore	8.0%	12.0%	Revenue rebounded in 2Q14	Launch new products	Positive but growth unlikely to be high
Philippines	6.0%	9.0%	Sales fell more than 20% YoY	Focus on tried-and-tested products	Negative
China	4.0%	7.0%	Revenue jumped 35% YoY	Strong focus on coffee and healthy beverages	Positive

Cost and Expense Trends

Selling & distribution expenses increased by 16.3% in 2Q14 due to rebranding campaigns and more promotions in Myanmar and Malaysia.
General & admin expenses rose by 3.4%.
Net interest income fluctuated, with a negative impact in some quarters.
Cost of goods sold increased by 8.8%, affecting gross profit.

Conclusion

Super Group is facing significant challenges in its core markets, with revenue and profit declines, rising costs, and currency and tax issues. Despite some positive trends in Thailand and China, the overall outlook is negative, leading to a downgrade to SELL. The target price has been reduced to SGD1.18, reflecting a more conservative valuation based on 15x FY15E EPS. The company needs to address its operational inefficiencies and market challenges to regain momentum.