Asian Century Stocks

Asian Century Stocks

Share this post

Asian Century Stocks
Asian Century Stocks
Multi Bintang update (MLBI IJ)
Copy link
Facebook
Email
Notes
More
Deep-dives

Multi Bintang update (MLBI IJ)

The return of tourists to Bali the last piece of the Multi Bintang puzzle. Estimated reading time: 17 minutes

Michael Fritzell's avatar
Michael Fritzell
Jul 09, 2023
∙ Paid
19

Share this post

Asian Century Stocks
Asian Century Stocks
Multi Bintang update (MLBI IJ)
Copy link
Facebook
Email
Notes
More
4
1
Share

Disclaimer: Asian Century Stocks uses information sources believed to be reliable, but their accuracy cannot be guaranteed. The information contained in this publication is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in such publications are those of the publisher and are subject to change without notice. You are advised to discuss your investment options with your financial advisers and to understand whether any investment is suitable for your specific needs. From time to time, I may have positions in the securities covered in the articles on this website. Full disclosure: I hold a position in Multi Bintang when publishing this article. Note that this is a disclosure and not a recommendation to buy or sell.

Summary

  • Multi Bintang (MLBI IJ) is Indonesia’s largest beer producer with a 60% market share. The “Bintang” brand name is incredibly strong and the preferred choice for most of Indonesia’s beer drinkers. The company is also protected by significant barriers to entry, including license restrictions and 150% import tariffs. These factors explain why Multi Bintang has been able to achieve a 100%+ return on equity in the past.

  • The company was hurt by the large-scale social restrictions that took place during COVID-19. These caused nightlife venues to be shut down and the borders to be closed. But the restrictions have now been taken away. Recent tourism data from Bali is encouraging. The number of arrivals is already back to 80% of pre-COVID levels and is now trending in the right direction.

  • I think there are plenty of reasons why Multi Bintang could become a growth stock yet again. Indonesia’s beer consumption per capita remains low. While muslims are never going to embrace alcohol, the rest of the population will. Save for extraordinary events in 2015 and 2020, that Indonesian beer market has been growing nicely.

  • I foresee a 2024e P/E ratio of 14 and an EV/EBIT of 10x for Multi Bintang. Those numbers are far below the peer group and historical averages. It’s also worth noting that Multi Bintang has historically paid out 100% of earnings as dividends. In other words, next year’s dividend yield is likely to be around 7%, which compares to a historical level of about 3%.

  • The main risks are a potential alcohol ban, competition from craft brewers and higher input costs. But neither of these factors are likely to derail the EPS recovery story, at least not in the short term.


1. Introduction to Multi Bintang

I first wrote about Indonesian beer brewery Multi Bintang in late 2021 ($):

Deep-dives

Deep-dive 2021-21: Multi Bintang

Michael Fritzell
·
October 10, 2021
Deep-dive 2021-21: Multi Bintang

Multi Bintang (MLBI IJ) is Indonesia’s leading beer producer. The company started in 1929 as “Nederlandsch-Indische Bierbrouwerijen” back when Indonesia was a Dutch colony. Today, Multi Bintang has a market share of almost 60%. Its flagship beer “Bintang Bir” is by far the most popular brand in the sector.

Read full story

My arguments in that report were as follows:

Keep reading with a 7-day free trial

Subscribe to Asian Century Stocks to keep reading this post and get 7 days of free access to the full post archives.

Already a paid subscriber? Sign in
© 2025 Delante Media Pte Ltd
Publisher Terms
Substack
Privacy ∙ Terms ∙ Collection notice
Start writingGet the app
Substack is the home for great culture

Share

Copy link
Facebook
Email
Notes
More