Company Name: SUPER GROUP LTD.
| Research House: UOB KayHian | Price Call: BUY | Target Price: 2.24 |
UOB Kay Hian raised its share price target for instant beverage maker Super Group to $2.24 from $1.87 and maintained its buy rating, saying falling commodity prices could translate into higher margins.
Super Group shares were flat at $1.88 and have gained about 43% since the start of the year.
The brokerage said it saw margins improving as prices of coffee and sugar have fallen more than 30% from their peak in the first half of 2011.
UOB said Super Group was a proxy for Myanmar, as about 16% of last year’s revenue came from the re-emerging Southeast Asian country of 54 million people, adding that growing consumerism indicated good long-term prospects.
Super Group also offers a proxy to rising coffee consumption in Indonesia, the brokerage said, adding that its joint venture with Petra Foods gives it access to a strong distribution network across the country.
“Other than a good potential in the branded consumer goods segment in Indonesia, we think that Super’s ingredient sales division will also get a strong boost from its joint venture, which has raised its visibility,” UOB said.
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