KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd's stock was the top gainer in morning trade today despite an analyst saying it missed earnings expectation for financial year 2023.
It was trading 34 sen, or 1.75 per cent higher at RM19.78 a share earlier.
RHB research said Carlsberg's financial year 2023 (FY23) results missed expectations on weaker-than-expected profit margin.
The company's net profit of RM319 million met 95 per cent and 96 per cent of the firm's and Street's estimates.
RHB research however expects the comany's top line to grow in 2024, driven by the relatively inelastic demand for beer and healthy legal total industry volume (TIV).
"That said, we continue to like the brewery sector for the steady demand for beer and continuous operational efficiency gains to mitigate cost inflation," RHB research said.
It maintained Buy on Carslberg with new RM22.20 target price from RM22.70.
The research house said the premiumisation strategy will also continue to drive favourable average selling price (ASP) and target the higher income groups that are more insulated from the inflationary pressures.
"Whilst the upcoming implementation of subsidy rationalisation and higher consumption taxes should impact consumption, we expect Carlsberg's topline growth to be sustained," it said in a note.
RHB research said the company announced plans to further upgrade its production facilities to drive operational efficiency.
This will be effective in mitigating any input cost inflation arising from unfavourable FX and hike in service tax with management expecting commodity prices to stay stable, it said.