Berli Jucker

Berli Jucker Plc (BJC)
 

Beat expectation: BJC reported a net profit of Bt550m for 4Q11, up 22.7% YoY and flat QoQ, and earnings of Bt2.18bn for FY11, up 14.5%. The 4Q11 number beat our estimate by 20% and the FY11 bottom-line was 4% ahead of our projection, due to a lower-than-expected effective tax rate and an FX gain. The operations of all business units performed in line with our expectations.
Results highlights: Sales totaled Bt8.2bn in 4Q11, up by 16% YoY and 4.9% QoQ on stronger sales across the Industrial, Consumer and Healthcare supply chains. Although the flooding caused customers to postpone deliveries of glass containers, the Industrial supply chain still reported sales growth of 11.5% YoY and 7% QoQ to Bt4.04bn, led by a 34.9% YoY and 16.1% QoQ jump in sales of aluminum cans, buoyed by strong growth in the domestic beer and soft drink markets.
Consumer supply chain sales rose by 17.5% YoY and 7.6% QoQ to Bt2.5bn, thanks to sales through the distributor in Vietnam and stronger performances by the snack, tissue and personal care units. The Healthcare supply chain reported a slight increase in sales, both YoY and QoQ, even though the medical equipment division faced some project delays during the beginning of the quarter.
EBIT margin was 9.07%, down from 10.31% in 3Q11 and 10.05% in 4Q10, due to higher logistics, storage and production costs during the flooding period.
Outlook: We expect earnings to sustain QoQ growth momentum into 1Q12, driven by a post-inundation margin improvement and lower raw material costs, particularly for palm oil. The long-term earnings trend is also good, led by expansion into neighboring countries.
What’s changed? Our profit forecast and target price remain unchanged.
Recommendation: BJC looks to be a good consumption play on strong economic expansion across mainland Southeast Asia—Thailand, Vietnam, Myanmar, Laos and Cambodia. We maintain our BUY rating with a YE12 target price of Bt39.50.