Super: Maybank-KE reiterated its Buy rating on Super (TP: $1.42), citing that the consumer group has started to roll out new premium products in Singapore, Malaysia and China, followed by the rest of its markets by 1H16.
New products are mostly coffee, and are priced 1.5-2x higher than its basic 3-in-1 offerings. These are expected to lift overall prices and margins over time.
House believes outperformance will come from retailers eager to work with Super to stimulate sales in a weak retail environment.
Longer term, Maybank-KE believes Super’s excellent financials will allow it to acquire its way into new growth areas and reward shareholders.
House expects FCF to improve markedly from FY15, now that its heavy-capex phase is over. Shorter term however, steep currency weakness in Malaysia and Myanmar may affect profits in FY15.
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