KUALA LUMPUR: Kenanga Research has raised its financial years 2022 (FY22) and FY23 forecasts for Fraser & Neave Holdings Bhd (F&N) by six per cent and 13 per cent respectively to reflect a slightly stronger recovery from the economy reopening.
Kenanga Research said the company's nine-month earnings of RM284 million had beaten its full-year forecast at 86 per cent but met market expectation at 76 per cent of full-year estimate.
"The positive deviation from our forecasts stems from strong contributions from Malaysia boosted by festivities and the reopening of the economy," it said in a note.
F&N saw its topline grow by three per cent to RM3.3 billion underpinned by strong showing from Malaysia which climbed nine per cent to RM1.8 billion but mitigated by weaker Thailand that declined three per cent to RM1.5 billion on account of the unfavourable baht.
In local currency terms, Thailand operation saw a moderate two per cent growth as domestic sales were affected by price increases.
In contrast, Kenanga Research said Malaysia's operations were boosted by strong performance given the festivities period in the first half of 2022 with strong contributions coming from its halal food segment in both the local and Middle East markets.
"Premised on a full reopening of the economy, we maintain our view of a robust and sustained topline ahead.
"Despite the prevalent headwinds, the encouraging economic activities recovery will continue to drive sales ahead, particularly for beverages, ready-to-drink products, out-of-home and hotel, restaurants and catering channels.
"Rising input costs is the only dampening factor with leading indicators showing input prices looking to remain elevated well into 2023," it said.
Kenanga Research, however, downgraded its call for the stock to "Market Perform" from "Outperform" previously and lowered its target price by 12 per cent to RM23.15 from 26.30.