A Full Analysis on Heineken Malaysia Bhd

On 7 October 2015, Heineken N.V. has acquired Diageo’s stakes in GAPL Pte Ltd, a private firm that owns 51% stake in Guinness Anchor Bhd (GAB), one of the two listed and licensed breweries in Malaysia. Thus, Heineken N.V. has emerged as GAB’s largest shareholder as it now owns 100% interest in GAPL Pte Ltd. Subsequently, GAB was renamed to Heineken Malaysia Bhd (HMB) to reflect and be aligned with Heineken’s corporate identity.

As I write, HMB is trading at RM 22.54 a share. So, is this a good time to buy / hold / sell shares of HMB? Here, I’ll list down 8 key things that you need to know about HMB before you invest:

#1: Stock Symbol

Ticker Symbol: KLSE: HEIM / KLSE: 3255
Market Capitalization: RM 6.81 Billion (9 July 2018)

Share Price: RM 22.54 (9 July 2018)

Industry: Consumer Products

Syariah Compliant: Nope

#2: Brand Portfolio

HMB operates from a 23.72-acre brewery site in Sungei Way, Selangor where it produces a wide range of alcoholic beverages which include:

  1. Heineken: The World’s No.1 International Premium Beer Brand.
  2. Tiger Beer: Iconic Beer Brand across Asia.
  3. Guinness: The World’s No.1 Stout.
  4. Strongbow Apple Ciders: The World’s No.1 Cider.
  5. Apple Fox Cider: Inspired Cider from New Zealand.
  6. Anchor Smooth: All-Time Local Favourite
  7. Kilkenny: Premium Irish Ale
  8. Anglia: Shandy
  9. Paulaner: Germany’s No.1 Wheat Beer
  10. Kirin Ichiban: Japan’s No.1 100% Malt Beer
  11. Smirnoff Ice: The World’s No.1 Pre-Mixed Drink
  12. Malta: The Preferred Non-Alcoholic Malt Beverage

#3: Financial Results

HMB has achieved consistent growth in revenue and profits over the past 10 years. Revenues increased from RM 1.27 billion in 2008 to RM 1.92 billion in 2017. With slight improvements in margins, HMB has reported growth in its shareholders’ earnings from RM 137.9 million in 2008 to RM 270.1 million in 2017. (Note: All figures presented have been adjusted to reflect HMB’s results from January 1 to December 31 for each financial year. This is because HMB has changed its financial year-end from 30 June to 31 December beginning in the year 2016.)

In 2012, HMB paid out RM 181.6 million in special dividends to shareholders and hence, reducing its shareholders’ equity from RM 516.6 million in 2011 to RM 379.7 million in 2012. As a result, it significantly increased HMB’s Return on Equity (ROE) from 30-40% levels achieved in 2008-2011 to about 60-70% levels in 2012-2017. In 2017, HMB has achieved a ROE of 74.91%, the highest in 10 years. This means, HMB has generated RM 74.91 in annual earnings from every RM 100.00 in shareholders’ equity in 2017.

Source: Quarterly & Annual Reports of HMB

Calculated based on Figures obtained from

Quarterly & Annual Reports of HMB

#4: Balance Sheet Strength

As at 31 March 2018, HMB has zero borrowings, has 1.51 in current ratio, and RM 15.3 million in cash reserves. HMB is in itself a cash-business and doesn’t need to rely on debt or raising new equity to finance its operations and plans for growth in the future.

From 1 July 2007 to 31 December 2017, HMB has brought in RM 2.36 billion in cash flows from operations. During the 10.5-year period, HMB has:

  1. Paid out RM 386.36 million (around 16%) in capital expenditures. 
  2. Paid out RM 2.16 billion (around 84%) in dividends to shareholders.

Source: Annual Reports of HMB

#5: Bills on Demand

On 3 September 2015, HMB had announced that it received bills of demand from the Royal Malaysian Customs of Federal Territory of Kuala Lumpur on additional excise duties and sales tax payments of RM 56.3 million where:

  1. RM 34.2 million: Claimed under the Excise Act 1976 from 28 August 2012 to 31 October 2013.

  2. RM 22.2 million: Claimed under the Sales Tax Act 1972 from 1 July 2012 to 31 October 2013.

The additional payments are based on a new method of valuation for excise duty which came into effect on 1 November 2013. The abovementioned bills of demand are based on historic claims for both excise duties and sale tax for the aforesaid period.

HMB strongly believes that the new method of valuation is not justifiable for the excises & sales tax payable for the period before 1 November 2013, hence, does not admit liability to the bills of demand. HMB would make timely and accurate announcements on this matter from time to time if necessary.

#6: P/E Ratio

HMB grew its earnings per share (EPS) from 45.6 sen in 2008 to 89.4 sen in 2017. At a stock price of RM 22.54 a share, HMB’s current P/E Ratio is 25.21. At current price, HMB is trading at its highest P/E Ratio.

  1. 10-Year Lowest P/E Ratio: 11.28 (2008)
  2. 10-Year Highest P/E Ratio: 25.4 (Current)
  3. Current P/E Ratio: 25.21

Calculated based on Figures obtained from

Quarterly & Annual Reports of HMB

#7: Dividend Yields

HMB has increased its ordinary dividends per share (DPS) from 24.0 sen in 2008 to 90.0 sen in 2017. At a stock price of RM 22.54, its dividend yield works out to be 3.99%, the lowest in 10 years.

  1. 10-Year Lowest Dividend Yields: 4.00% (Current)
  2. 10-Year Highest Dividend Yields: 6.07% (2009)
  3. Current Dividend Yields: 3.99%

Calculated based on Figures obtained from

Quarterly & Annual Reports of HMB

#8: Investor Relations

For further enquiries or to request for additional investment information on Heineken Malaysia Bhd’s Investors Relation matters, you may contact:
Ng Eng Kiat

Corporate Communications Manager

Email: engkiat.ng@heineken.com

Telephone: 03-7861 4323

Website: http://www.heinekenmalaysia.com/investor_relations.html

#9: Major Shareholders

As at 22 March 2018, Heineken Malaysia Bhd’s main shareholders and their shareholdings are as followed:

– GAPL Pte Ltd: 51.00%

– Great Eastern Life Assurance (Malaysia) Bhd: 3.38%

– SSBT Fund MMGN for Mawer Global Small Cap Fund: 1.24%

– Exempt An for UOB Kay Hian Pte Ltd (A/C Clients): 1.21%

– Aberdeen Asian Income Fund Limited: 1.15%

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