Brokers' views: Midas Frontier

As more Asian consumers reach middle-class status with high savings and little or no debt, Midas has identified three value plays on the Asian consumer.

First up is Godrej Consumer Products (GCPL), listed on the Bombay Stock Exchange with a US$2.1 billion market cap. Fast-growth GCPL is consolidating its presence in the soap and hair colour markets, where it has a vast product range spanning various price points. 

With a renewed focus on efficiency and its pipeline of new products, GCPL – currently trading on a p/e of 21.9 with a yield of 1.6 per cent – is ‘good value for a fast-growing personal care products company’.

Yummy money

Also worth examining, suggests Midas, is NYSE-listed Yum! Brands Inc, which operates more than 36,000 restaurants worldwide under brands including KFC, Pizza Hut and Taco Bell, generating 

$36 billion-plus sales. Yum! is well positioned in the Asian, Latin American and African markets and over the past five years has outperformed the FTSE All Share index by 51 per cent. ‘Trading on a p/e of 15.1 with a yield of 2.4 per cent,’ says Midas, ‘its shares are attractive.’

Finally, the broker likes Asia Pacific Breweries (APB), which owns a portfolio of approximately 40 beer brands and is best known for producing the home-grown lager Tiger Beer. APB’s revenues over the past five years have grown at an impressive compound annual growth rate of 11 per cent on a combination of higher volumes and its drive for organic growth in the Indochina regions (Cambodia, Laos and Vietnam). Midas considers that the shares, trading on a p/e of 12, are inexpensive.