Super

Super: MKE thinks the worst is likely over for Super after the 15% drop in share price following the release of a disappointing set of 3Q13, and things are taking a turn for the better. For instance, 1) In Myanmar, the company’s second-biggest market, volumes should return in 4Q13. 2) in Philippines, revenue had plunged 51%y/y but channel checks suggest that end-user demand remains healthy and some of the headline decline was partly due to de-stocking. 3) Non-dairy creamer decline should be overcome in 1-2 quarters as management tries to diversify customer base. MKE expects the 4Q13 results to feature an 8% y/y increase to $561m, recurring net profit of $85.5m, up 10% y/y, and describes current share price as a good chance to accumulate. Key risks include a prolonged political standoff in Thailand, which may hurt Super’s sales in central Bangkok. MKE upgrades to a Buy from Hold, with TP of $4.55