KUALA LUMPUR: Carlsberg Brewery Malaysia Bhd's profit margins are expected to remain elevated, supported by the price adjustment in the third quarter of 2025, ongoing efficiency improvements, and favourable input costs and currency movements.

RHB Research said the brewery's generous dividend payouts are likely to continue, supported by ongoing efforts to curb contraband trade.

"We foresee frontloading to have occurred in October before the higher excise duty kicked in November.

"With the volume expected to slow subsequently, we expect the breweries to intensify their marketing efforts via consumer engagements, value promotion etc in stimulating consumption amidst higher selling prices," the firm said in a note.

RHB Research said the government's Visit Malaysia Year 2026 initiative is expected to boost sales by supporting strong tourist arrivals.

The firm noted that Carlsberg Brewery's nine-month 2025 results met expectations, supported by a strong quarter-on-quarter sales rebound and expanding margins.

The brewery's core net profit of RM280 million, up four per cent on a yearly basis, represented 76 per cent of the firm's full-year forecast and 79 per cent of the consensus estimate.

RHB Research added that although the excise duty hike in November poses a headwind for the sector, it may have already been priced in, with brewery stocks currently trading below their historical averages.

"Demand could be dented in the immediate term, but should normalise eventually. Margin expansion and premiumisation strategies will continue to be the primary drivers for earnings growth and high dividend payout," it added.

RHB Research maintained its "Buy" rating on Carlsberg Brewery, keeping its target price at RM20.