Super Group

Super Group: OSK-DMG upgrades to Buy from neutral (TP $3.99), premised on an improving risk reward trade off following a 32% price correction to a $3.05 low this morning post 3Q13 results. While its quarterly results disappointed – prompting earnings and recommendation downgrades – the house believes its investment merits as a dominant regional instant beverage player remain intact. Upgrade to BUY at an unchanged TP of $3.99. Super has a well-diversified revenue mix from China, Indonesia, Malaysia, Myanmar, the Philippines, Singapore and Thailand. With an estimated 12% market share, OSK-DMG believes the company will continue to benefit from growing instant beverage consumption in the region. Over the past decade, it has achieved 16% revenue CAGR to SGD519m and 33% profit CAGR to $79m as at end-FY12. It also has net cash of $87m as of Sep.