Heineken’s recovery to continue, leveraging on attractive product mix
KUCHING: Heineken Malaysia Bhd’s (Heineken) recovery is expected to continue, with analysts believing that the group would be able to leverage on its attractive product mix and further expand its customer base.
To recap, Heineken’s net profit increased by 59 per cent to RM246 million for the full year ended December 31, 2021 (FY21), compared to RM154 million in FY20.
“While we are encouraged by the good set of results delivered by Heineken in FY21, however, we highlight that its performance has yet to return to pre-Covid levels,” the research arm of Hong Leong Investment Bank Bhd (HLIB Research) said.
“We expect recovery to continue, despite the recent surge in cases, given that the government has indicated that there will be no more lockdowns going forward.
“That said, the rate of recovery would very much depend on the consumers’ behaviour, as consumers adapt to a new normal and potentially avoid large events and mass gatherings for the time being.
“In light of the current inflationary pressures, management would also be keeping a close eye on input costs and does not rule out further price adjustments in the future to compensate higher costs, if need be.”
Meanwhile, the research arm of Kenanga Investment Bank Bhd (Kenanga Research) highlighted that challenges are set to continue as the group is expected to incur higher cost of raw materials as a result of rising inflation and disruption in the supply chain.
“Taking into account of the abovementioned, coupled with the surge in the Omicron variant, the group could mitigate these by further streamlining their operations,” Kenanga Research said.
“In addition, we believe that Heineken would be able to leverage on its attractive product mix and further expand its customer base.
“Finally, as the government reaches its targeted vaccination rates, entertainment outlets could be given the green light to operate again as usual at pre-pandemic hours - this potentially being a major driver for increased beer sales.”