SUPER GROUP

SUPER GROUP - 15th Feb 2016

Super Group Ltd, (“Super”, “the Group” or “超级集团有限公司”), the leading integrated instant food and beverage (“F&B”) brand owner with a regional footprint in Asia.

SUPER GROUP is an integrated food and beverage company with 2 key segments that is driving the company revenue that is:

-Branded Consumer (BC) : Primarily Coffee & Cereal
-Food Ingredients (FI): Primarily Non-Dairy Creamer and Soluble Coffee Powder.

SUPER REPORTS 3Q15 NET PROFIT OF S$7.4M ON REVENUE OF S$121.0M  Strong financial position; cash & bank balances and net asset value per share increased to S$104.4m and 45.77 SG cents respectively  Group stays focused on its strategy of branding, production innovation and diversification  ESSENSO, the new premium range of microground instant coffee will be launched in selected countries in 4Q15.( http://infopub.sgx.com/FileOpen/Super_Group-3QFY2015_Results_Press_Release.ashx?App=Announcement&FileID=377874)

Looking ahead, we are excited about the launch of new innovative products such as ESSENSO; a new premium coffee product which offers the consumers the best of both worlds – the taste of freshly roasted premium coffee with the convenience of instant coffee. ESSENSO microground coffees are produced from 100% premium Arabica beans using our proprietary MicroPlusTM technique. Owl Kopitiam Roast was also rolled out to offer consumers a taste of Straits Asian traditional coffee. We reiterate our confidence in our strategy of branding, product innovation and diversification that continues to position us to meet challenges head-on.”

 1) Sale of Food Ingredient for instance to other beverage players that require the use of Non-dairy creamers for their clients to be used in the business such as bubble tea and soybean milk products.

2) Sale of branded consumer products to consumers to the public like us, the people on the street.

If things pan out, Super Group might be able to profit from both upstream and downstream operations on these two engine of growth that is constantly bringing in good money for Super of today.

Strong Financial Position As at 30 September 2015, the Group’s equity attributable to owners of the Company amounted to S$510.4m, translating into a net asset value per share of 45.77 SG cents (31 December 2014: 44.62 SG cents). The Group’s cash and bank balances remained robust at S$104.4m at the end of the current quarter.

Cash is King . Super has a solid record of cash generation. Their production capacity has been able to achieve constant increased of revenue of about S$240 million in capital expenditure deriving from 60k to about 270k MT of their products . During this period shareholders also received consistent cash dividends payout rate of ~50% as indicated in their dividend policy. 

Quite a good and strong decent company with conservative balance sheet and positive cash flow that could be an ideal candidate for paying dividend of about 3 to 4 % yields with potential for future revenue growth.

Super has been experiencing a continuously selling down from the high of 97 cents from 6th Nov 2015 and hitting the low of 68 cents on 18th Jan 2016.

EPS of about 4 cents. The current price of 70.5 cents is about PE 17.5 times.

MACD is heading towards the oversold territories.

Any further price weakness might be a good opportunity to accumulate/Long.

Perhaps a short term decent Target price of 84 cents, PE 21 times could be achievable for such a growth company with solid cash flow + profitable .Believe they will be able to ride out during this difficult time and explore more new products to boost the company revenue stream & overall profit in time to come.

(trade base on your own decision)