Super Grp

Super Grp: UOB Kay Hian maintains Buy but lifts TP to $3.00 to a new street high, from $2.55. House sees potential upside in 2013-14F earnings from its re-branding exercise in 1Q13. This could result in market share gains and improved pricing power. Super will undertake a group-wide rebranding exercise in 1Q13 and targets tangible upside in sales by 4Q13. Mgt commenced its re-branding exercise for its Owl brand in Oct 11 and understand the uplift has been very encouraging, with market share gains and sales increases of more than 10%. House positive on group rebranding exercise as this could further enhance its brand positioning and build on its strong market share. More importantly, think a successful re-branding exercise could allow Super to gradually raise product prices, which are currently 8-10% below that of peers such as Nestle. Add that grp is unlikely to raise prices in 4Q12 and will time the price revision together with its re-branding exercise in 1Q13. No guidance on the potential price increase was provided but historically, mgt has been quite conservative in pricing policy, increasing by a magnitude of 3-6% each time or a reduction in the number of sachets per packet.