SuperGrp

SuperGrp: CIMB downgrades to Neutral from O/p with $3.27 TP. House think the rebranding comes at an opportune time as Branded Consumer sales in mature markets may have slowed. House estimate it is the younger markets that are driving Branded Consumer sales and that SG could be experiencing low single-digit growth. Channel checks reveal Nescafe was FY12’s best seller in Singapore. If executed well, the campaign could see Branded, Consumer sales growth exceed its historical average of the past 2 years of 10%. House think there is little risk of alienating its core drinkers as Super will not be changing its taste profile and has taken great pains to maintain its brand heritage through careful packaging design and consumer re-education. Overall, house turn Neutral on the stock on valuations. Tthink growth expectations have largely been priced in after the stock’s meteoric 140% rise in FY12. What could drive the stock further is if the campaign sees returns faster than expected and rising coffee prices would be the greatest risk to earnings.