Operating Margin - Heineken Malaysia Bhd (KLSE:HEIM)

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Price: 23.24 MYR 1.48%

Market Cap: 7B MYR

21.7%

Current

21%

Average

8.7%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

21.7%

Operating Profit

604.8m

Revenue

2.8B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
MY	H	Heineken Malaysia Bhd KLSE:HEIM	7B MYR	22%
BE		Anheuser-Busch Inbev SA MIL:ABI	114B EUR	25%
BE		Anheuser Busch Inbev SA XETRA:1NBA	110.2B EUR	27%
NL		Heineken NV AEX:HEIA	39.4B EUR	14%
BR		Ambev SA BOVESPA:ABEV3	212.7B BRL	25%
NL		Heineken Holding NV AEX:HEIO	17.7B EUR	11%
DK		Carlsberg A/S CSE:CARL B	110.9B DKK	14%
JP		Asahi Group Holdings Ltd TSE:2502	2.5T JPY	9%
HK		Budweiser Brewing Company APAC Ltd HKEX:1876	103.2B HKD	17%
JP		Kirin Holdings Co Ltd TSE:2503	1.9T JPY	8%
CN		Tsingtao Brewery Co Ltd SSE:600600	84.4B CNY	17%

Heineken Malaysia Bhd
Glance View

Market Cap

7B MYR

Industry

Beverages

In the tropical heart of Southeast Asia, Heineken Malaysia Bhd stands as a keystone in the country’s dynamic beverage industry. As a subsidiary of Heineken N.V., it carries forth a legacy of brewing excellence deeply rooted in Malaysia's diverse culture and vibrant markets. The company, originally established as Guinness Anchor Berhad in 1965, underwent a significant transformation in 2015, adopting the Heineken brand to better reflect its global pedigree and aspirations. Operating out of its state-of-the-art facilities in Petaling Jaya, Heineken Malaysia crafts a wide portfolio of products that include world-renowned brands like Heineken, Tiger Beer, and Guinness, along with a variety of local and regional brews. By leveraging its strategic marketing and innovative product placements, the company caters to a broad spectrum of consumers, ranging from mainstream beer enthusiasts to niche markets craving craft and premium selections. Heineken Malaysia’s financial engine thrives on a robust distribution system that crisscrosses urban and rural landscapes, ensuring its brews reach every corner of the nation. Its revenue model is deeply entwined with both on-trade and off-trade channels, capitalizing on a network of pubs, sports bars, and retail outlets which form the backbone of Malaysia’s social fabric. By enmeshing itself into the daily lives of its consumers, through sponsorship of events and strategic partnerships, Heineken Malaysia not only fosters brand loyalty but also drives consistent sales growth. Furthermore, the company is proactive in embracing sustainability practices—integrating environmental stewardship into its business processes—which makes it not just a purveyor of beverages but a forward-thinking entity contributing to a circular economy. This pragmatic blend of tradition, innovation, and sustainability ensures Heineken Malaysia is well-positioned to quench the thirst of future generations while fostering economic growth.

View HEIM Analysis

HEIM Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Heineken Malaysia Bhd
KLSE:HEIM