Super Grp

Super Grp: UOB Kay Hian raise 2012-14 net profit forecasts by up to 15%, factoring in higher margins for its ingredient and branded consumer segment. This leads to a 24% rise in our PEG-based target price to $3.71 (previously $3.00). Super remains on house BUY list with potential catalysts from further consensus profit upgrades, rising dividends and potential M&As. House see see promising growth prospects for consumer branded goods in key mkts such as Thailand and Myanmar, which could deliver top-line growth in excess of 10% p.a. The group is also enjoying a strong pick-up in demand growth from the Philippines and Msia. The latter is due to a revamp in its distribution channel in Msia. As a single mkt, Southeast Asia (SEA) enjoyed a strong uplift of 19% yoy in 3Q12 sales. Despite the high valuation, house believe its improving brand positioning, strong cashflow (of more than $60m p.a.), solid execution and market share in selective growth markets such as Myanmar, Indonesia and Philippines puts the group on a new growth trajectory. Following its strong execution, project its ROE to range 20- 21% in 2013-14. This is at its historical high since 2003.