KUALA LUMPUR (Aug 6): Heineken Malaysia Bhd (KL:HEIM) fell on Thursday to its lowest in more than four years as analysts slashed their forecasts after a weaker-than-expected quarter.

At least two research houses downgraded the stock. Halfway in, Heineken Malaysia met just one-third of the consensus full-year earnings forecasts, and sales could remain subdued in the remaining months of the year amid weak consumer sentiment.

“We expect the demand recovery to remain gradual amid a structural shift in consumption towards off-trade channels and continued cautious consumer spending in the prevailing economic environment,” TA Securities said and downgraded the stock to ‘hold’.

Shares of the Dutch multinational brewer’s locally listed unit fell as much as RM2.10 or 11% to RM17.00, a level last seen in February 2022. The stock ended the day at RM17.10 after more than four million shares exchanged hands, giving Heineken Malaysia a market capitalisation of RM5.2 billion.

Heineken Malaysia has declined some 26% from its peak in February when the stock enjoyed unanimous "buy" calls. Since then, the company has been cutting back ex-brewery sales to trim bloated inventory in its supply chain.

There are now six "buy", three "hold", and no "sell" recommendations for the stock among the nine research houses tracked by Bloomberg. The average 12-month target price is now RM23.68.

The selldown appeared to have spilled over to Carlsberg Brewery Malaysia Bhd (KL:CARLSBG), dragging the Danish brand rival down close to 6% to RM14.94, its lowest in nearly 10 months.

For Hong Leong Investment Bank, the muted volume outlook for brewers in 2026 is “largely understood” by investors, with sector valuations now trading mostly below the five-year average.

The consumption boost during FIFA World Cup is also expected to be relatively modest compared to other previous tournaments, the research house said, amid less favourable late-night and morning viewing hours in Malaysia.

Still, Hong Leong Investment is keeping its ‘buy’ call on Heineken Malaysia due to potential upside in 2027 as its sister company in Singapore fully transitions to importing supply.

In March, the Dutch parent company announced that its manufacturing operations in Singapore will be phased out and production will shift to Malaysia and Vietnam. The transition will be gradual, with full impact expected only by the third quarter of 2027.

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