Stock Faceoff | Carlsberg Brewery Malaysia Berhad vs Heineken Malaysia Berhad

Carlsberg Brewery Malaysia Berhad (“Carlsberg Malaysia”) (KLSE:CARLSBG) and Heineken Malaysia Berhad (“Heineken Malaysia”) (KLSE:HEIM) are two local brewers listed on the Malaysian stock exchange. 

In this article, we will make some quick-and-dirty comparisons, numbers-wise, between the two companies to help you determine which might give you more value for money.  

Introducing the companies

Carlsberg Malaysia is part of the Carlsberg A/S (Carlsberg Group). The company is a dynamic brewer with operations in Malaysia and Singapore and stakes in a brewery in Sri Lanka.  The company also exports its products to Thailand, Taiwan, Hong Kong, Laos, Maldives and Guam. Its international portfolio of brands includes Carlsberg, Kronenbourg 1664 Blanc, Asahi, Somersby, Connor’s Stout, etc.

On the other hand, Heineken Malaysia is 51% owned by GAPL Pte Ltd (GAPL) and 49% by the public. The company’s name was changed to Heineken Malaysia Berhad on 21 April 2016 following Heineken NV’s acquisition of Diageo Plc’s stakes in GAPL in October 2015. Heineken Malaysia is a leading brewer in the country, with a portfolio of iconic international brands including Heineken, Tiger Beer, Guinness, Strongbow, Apple Fox, Anchor, Kilkenny, Anglia, etc. 

The table below shows the market capitalization, revenue and profit levels for both companies. Note that the market capitalisation is as of 14 August 2020, and the revenue and profit numbers both relate to the fiscal year 2019.

Carlsberg MalaysiaHeineken Malaysia
(All numbers in RM)
Market Capitalisation7.09 billion6.69 billion
Revenue 2.26 billion2.32 billion
Profit after taxation 300.38 million312.97 million

Round 1: Profitability

We start by looking at the profitability of each company in terms of their gross profit margin, net profit margin, and return on equity. 

Carlsberg MalaysiaHeineken Malaysia
Fiscal year 2019
Gross profit margin31.78%30.55%
Net profit margin13.31%13.49%
Return on equity (“ROE”) ratio191.68%79.41%

From the above table, both companies appear comparable in terms of gross profit margin and net profit margin. However, Carlsberg Malaysia has a much superior ROE ratio compared to Heineken Malaysia. Indeed, its ROE ratio of 191.68% is twice that of its competitor. We give the edge here to Carlsberg Malaysia as its management is more efficient in allocating and converting every dollar of investor capital into profit. 

Winner: Carlsberg Malaysia

Round 2: Liquidity

Carlsberg MalaysiaHeineken Malaysia
Fiscal year 2019
Current ratio0.741.06
Cash ratio0.160.02
Net gearing ratio (Net debt / equity)N/A – net cash21.04% 

From the table above, Heineken Malaysia has a slightly better current ratio of 1.06 compared to Carlsberg Malaysia of 0.74. This means that Heineken Malaysia has more than enough resources in terms of current assets to cover its current liabilities. 

Meanwhile, both Carlsberg Malaysia and Heineken Malaysia have maintained relatively low cash ratios of 0.16 and 0.02 respectively. This is not surprising as both companies are known as generous dividend payers, distributing the majority of profits earned each year as dividends. 

While Heineken Malaysia has a low net gearing ratio of 21.04%, Carlsberg Malaysia has an even stronger liquidity position as it is in a net cash position.  Overall, we would give the advantage to Carlsberg Malaysia for coming out on top on 2 out of 3 of the measurements.

Winner: Carlsberg Malaysia

Round 3: Growth

We will compare the compounded annual growth rate of revenue and net profit of the two companies for the past 5 years. Companies that can grow their sales and profitability can see their share price rise. 

Carlsberg MalaysiaHeineken Malaysia
Fiscal year 2015-2019
Revenue growth7.98%7.32%
Net profit growth8.07%9.94%

While Carlsberg Malaysia’s revenue growth is slightly faster than Heineken Malaysia, the tables are turned where Heineken Malaysia has edged Carlsberg Malaysia in terms of net profit growth. We will award a tie here as both companies are evenly matched with regards to their growth rates.  

Winner: N/A – tie

Round 4: Valuation

Finally, we will compare the price to earnings (“PE”) and dividend yields of the companies. 

Carlsberg MalaysiaHeineken Malaysia
Dividend yield3.87%4.87%
Share price (as at 14 August 2020)RM23.20RM22.16

(Source: Google Finance)

Heineken Malaysia is trading at a slightly cheaper valuation than Carlsberg Malaysia. Heineken Malaysia’s dividend yield is also higher at 4.87% versus 3.87% for Carlsberg Malaysia. 

While Heineken Malaysia’s valuation is more attractive, it is important to understand why the market is willing to award Carlsberg Malaysia a slight premium. Perhaps the market is more optimistic about Carlsberg Malaysia’s growth prospects and business expansion. It could also be because Carlsberg Malaysia has a far better ROE ratio.  

Winner: Heineken Malaysia


In summary, Carlsberg Malaysia is the overall winner here. While this is a simple exercise, comparing just a few financial aspects of both companies, it hopefully serves as a good starting point in deciding which company is more interesting to investigate further. 

Aside from the financial metrics, we urge investors to carefully study the prospects for each business, and consider the capabilities of each management team in executing their business plans. 

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