ECONOMIC MELTDOWN WILL NOT IMPACT GAB'S EARNINGS, SAYS OSK RESEARCH

KUALA LUMPUR, Aug 9 (Bernama) -- In the event of a slowdown in the domestic
economy or in the worst-case, a recession, Guinness Anchor Bhd (GAB) will not
feel the pinch, says OSK Research.
In a research note here Tuesday, OSK Research said GAB could potentially
benefit from falling material prices.
"Drinkers are likely to downgrade from more expensive alcoholic beverages
such as whisky and vodka to cheaper ones.

"Excluding traditional alcoholic drinks like tuak and rice wine, beer is
arguably the cheapest alcoholic beverage and hence, we believe its consumption
contraction is likely to be minimal, if any," it added.

The research house said there is huge potential for GAB to increase sales
in Sabah and Sarawak, East Malaysia states, given that geographically, sales in
the region surged 20 per cent year-on-year, due to stricter government
enforcement on smuggled beer sales, which initially made up some 80 per cent of
the market.

"Given the clampdown on beer smuggling, we believe there is huge potential
for GAB to increase sales in Sabah and Sarawak," it added.

Meanwhile, OSK Research maintained the "buy" call on GAB with no changes in
its earning's forecast, which implies a 13.9 per cent earnings growth for
financial year 2012 and 7.7 per cent for the following financial year.

For its financial year ended June 2011, GAB recorded a 18.5 per cent
increase in pre-tax profit to RM242.88 million compared to RM204.99 million last
year.

Its revenue also grew by 10 per cent to RM1.49 billion from RM1.36 billion
while net profit increased 19 per cent to RM181.4 million from RM152.7 million
previously. (USD1=RM2.99)

-- BERNAMA