Super Group

Super Group: Super Group 1QFY14 net profit slumped 19% y/y to $17.8m, partially dragged by the absence of FX gain in the quarter. Revenue slipped 6% to $124.6m on slower branded consumer (-6%) and food ingredients (-6%) sales. The group was affected by the continued civil unrest in Thailand, its largest branded consumer market, which discouraged businesses from stocking up their inventories. The food ingredients segment saw lower demand in Indonesia, partially offset by recovering sales into East Asia markets. Meanwhile, gross margin was stable at 37.5% on its cost saving initiatives, which include streamlining its distribution network in China and manufacturing its own key ingredients such as liquid glucose syrup solid (LGSS) and botanical herbal extracts. The weakened results, which make up only 20% of street's full year estimates, came on the back of the region’s challenging market conditions and rising commodity prices. The Group expects market conditions to remain competitive while rising raw material costs and currency fluctuations will impact the Group’s operating performance. Based on the current price of $3.22, Super trades at 21x forward P/E compared to its regional peers of ~23x.