Super Group: (S$0.77) Uninspiring 2Q17 results with slightly bitter aftertaste
- 2Q16 results came in below expectations as net profit slipped 6.6% to $9.8m
- Revenue fell a sharper 8.4% to $115m on softer sales in branded consumer (-6.3% to $75m) and food ingredients (-12.1% to $40m)
- Gross margin expanded to 37.3% (+1.8 ppt)
- Maybank KE notes that the surprise weakness in its Myanmar operations stemmed from price discounts offered to its main distribution partner to tide it through the slump in the kyat.
- MKE notes that the upcoming 3Q16 is seasonally weaker and with economic conditions worsening, competition could rise if demand continues to be lacklustre.
- The stock has limited near term catalysts as reflected in street ratings comprising 1 Buy, 7 Holds, and 1 Sell with consensus TP of $0.87.
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