Super Group

Super Group: 1QFY14 results missed. Net profit slumped 19% y/y to $17.8m (20% of consensus’ FY14 estimate), partially due to FX gains booked in 1Q13. Revenue slipped 6% to $124.6m on slower branded consumer (-6%) and food ingredients (-6%) sales. The group continued to be affected by the civil unrest in Thailand, its largest branded consumer market, which discouraged businesses from stocking up on inventory. Meanwhile, the food ingredients segment saw lower demand in Indonesia, which offset recovering sales into the East Asia markets. Gross margin remained stable at 37.5%, aided by cost saving initiatives - streamlining the distribution network in China and manufacturing own key ingredients such as liquid glucose syrup solid (LGSS) and botanical herbal extracts. Management expects market conditions to remain competitive, while noting that 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. Latest broker recommendations: Maybank-KE maintains Hold with TP of $3.00