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Since the pandemic, Heineken Malaysia has improved its performance, with ROA rising to 27% (2023/24) from 16% (2020/21). However, this growth has been driven by topline expansion rather than margin improvements. Revenue is 45% higher, but gross profit margins declined from 29% to 27% comparing the 2 periods.
With a 3.8% CAGR from 2019 to 2024, Heineken’s growth mirrors Malaysia’s long-term GDP rate. If this continues while maintaining current margins and costs, profits should grow steadily. However, there are signs of improving efficiency, as operating profits and ROA have increased, indicating better cost management and asset utilization.
From a fundamental perspective, Heineken remains a strong performer, reflected in its position on the Fundamental Mapper. However, from a value investing standpoint, the stock is trading at 17x PE and only 8% below its five-year high, suggesting limited margin of safety.