Malaysia: Carlsberg and Guinness stocks remain flat despite break in tax hike

Brewery stocks are still flat despite Malaysian government decision not to raise excise tax after 3 consecutive years of hikes. OSK notes Malaysia still has highest tax regime in world after Norway, Dow Jones Newswires released September 04.

Also, breweries will have to absorb incremental costs of security ink marking fee of MYR0.055/stamp implemented since April, which estimated to cost industry MYR30 million/year.

"This is likely to wipe out the gross margin by 1.5% point," says analyst. OSK downgraded Guinness Anchor’s rating to ‘neutral’ from ‘buy’ with MYR6 target; it kept Carlsberg at ‘neutral’ with MYR5.10 target in view of unexciting growth outlook. However, both stocks remain attractive dividend plays with yields around 7%-8%. Carlsberg stays flat at MYR5.05; Guinness remains flat at MYR5.70.

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