Basic HTML Version
Investor Interview: Consistent
Messages and Very Accessible
I have covered GAB on and off for the past 15
years, and have a comfortable relationship with
the management. Alignment of management and
focus has improved and evolved in the last five
years, and the Company’s impressive financial
results clearly show that management has
successfully focused on improving operational
processes, teamwork, marketing and financial
controls.
GAB has changed their approach to investor
relations. 10 years ago, GAB was behind the
competition in this area, but is now a leader,
giving consistent messages at their twice-a-year
investor relations meetings. We find GAB more
accessible and transparent than many of its peers
in the fast moving consumer goods industry. Our
local and foreign clients find management both
approachable and insightful.
Overall, we don’t have any real concerns about the
Company, noting that GAB operates in a regulated
and mature industry. But it is positive to see an
energetic management which ensures continuous
modest growth and gains in market share.
I S CORPORAT E R E SPONS I B I L I T Y
I MPORTAN T TO I NV E S TORS ?
The investment community generally does not
focus on Corporate Social Responsibility (CSR)
- they focus more on financial performance.
Nevertheless, we monitor CSR as the lack of
CSR could potentially imply business risks. We
know that a socially undesirable event could be
detrimental to the perception of a company’s
products or to company’s reputation, and
can undo all the good things that a company
has painstakingly built. The suicide cases at
Foxconn’s operations in China are a case in
point (attributed to poor working conditions),
which leads to a sharp rise in labour costs and
eventually penalises the company’s bottom
line. We probably don’t give enough credit for
good behaviour. However, a company with bad
behaviour will be penalised.
For GAB, we particularly value their environmental
target (resource conservation) and community
projects. For their customer base, Chinese
education funding is a critical aspect. We are also
happy with the Sensible Drinking programme.
It is important that initiatives are executed in
a sustainable manner, and I’d like to see more
youth programmes to instill values at school
level (e.g. green schools, sports, charity and
entrepreneurship).
Transparent
reporting
and
constant
communication is important. I find the GAB
Foundation website very informative, but would
like to see the latest status updates on all the
projects or upcoming activities.
About Vincent Khoo
Vincent Khoo is the Head of Research for
Malaysia at UOB Kay Hian. He covers Market
Strategy, selected consumer stocks and
oversees the production of a full suite of
research products.
Vincent has around 20 years’ experience
in equity research, including a 4-year stint
in the US. Prior to joining UOB Kay Hian,
he headed the research teams at Hwang
DBS Vickers Research, and more recently,
Maybank Investment Bank, where he
successfully led the team to prominence,
topping The Edge Malaysia’s Polls as the
top-rated local research house in 2008. He
was also rated as one of the top analysts in
the Asiamoney Brokers Poll 2008, as well as
best analyst and one of the top strategists,
consumer and auto analysts in The Edge
Malaysia Polls in 2007-08.
Vincent is a Certified Financial Analyst and
holds a MBA in Finance from the University
of Cincinnati.
Meeting expectations of socially responsible investors
We believe that investors will increasingly be concerned about our sustainability reporting. In Malaysia, we believe that the impending ESG Index to be
launched by Bursa Malaysia will drive a growth in Socially Responsible Investments (SRI) over the coming years. At the same time, mainstream investors
are starting to see the financial sense in preserving resources and reducing cost and building a strong license to operate.
We were pleased to be listed as the leading beer producer in Asia in a 2010 report by investment research house Responsible Research http://www.
responsibleresearch.com/Beverages_in_Asia-Issues_for_Responsible_Investors.pdf. In the same report, we were listed as leaders for both energy and
water, due to our pro-active approach.
An analyst briefing by GAB.
G U I N N E S S A N C H O R B E R H A D
( 5 3 5 0 - X )
21