Berli Jucker

Berli Jucker Plc (BJC)

As expected: BJC reported a 2Q12 net profit of Bt555m, up by 13% YoY but seasonally down 14% QoQ. The number was in line with our estimate and the consensus.
Results highlights: The 2Q12 top-line grew by 24% YoY and 4% QoQ to Bt9.2bn on stronger sales across all business units. However, GM fell by 110 bps YoY to 23.4%, due to the operational commencement of an aluminum factory in Vietnam (TBC-Ball).
The Industrial supply chain reported sales of Bt4.1bn, up by 18% YoY on better sales of glass packaging and aluminum cans. However, the division’s profit fell 31% YoY, due to the start-up of TBC-Ball in May, as well as higher energy costs and raw material prices for the glass packaging business.
The Consumer supply chain posted sales of Bt2.6bn, up 21% YoY, driven by stronger sales for the snack, drink and personal care units. However, profit grew only 7% YoY, due to higher labor costs and a loss at Danone Dairy.
The Healthcare supply chain reported an impressive performance. The division’s sales rose 29% YoY to 2.1bn and its net profit jumped 66% YoY to Bt199m, thanks to increased sales of vaccines, surgery-related machines, specialty chemicals and stationary.
BJC announced an interim dividend of Bt0.32/share. XD on August 22.
Outlook: We expect 3Q12 earnings to improve QoQ on a higher utilization rate at TBC-Ball. The best bottom-line of the year should be in 4Q12 on seasonality.
What’s changed? Our profit forecast and target price stand unchanged.
Recommendation: We like BJC’s long-term story— building and integrating supply chains and expanding in and entering neighboring countries. However, its current valuation looks full at an FY12 PER of 26x and PEG of 1.7x. We maintain our HOLD rating.