Thai Beverage - RHB Invest 2020-04-16: Pouring Water On Songkran

THAI BEVERAGE PUBLIC CO LTD (SGX:Y92) | SGinvestors.io THAI BEVERAGE PUBLIC CO LTD (SGX:Y92)

Thai Beverage - Pouring Water On Songkran

  • The COVID-19 pandemic has resulted in a partial lockdown in Thailand. In the latest measure to contain the spread of the virus, the Government has postponed the Songkran holidays (13-15 Apr) to deter gatherings. All provinces have also banned the sale of alcohol during this period.
  • We lower our Target Price as we expect Thai Beverage (SGX:Y92) to experience some negative impact from this development. Maintain BUY.



No alcohol during Songkran.

  • Thailand has banned the sale of alcoholic drinks and closure of venues selling alcohol during the Songkran holidays to prevent the viral contagion. The ban periods for provinces differ with some bans only lasting two days, some until 30 Apr, while others are until further notice. In Bangkok, the ban would last from 10-20 Apr. The Government has postponed the festive holiday but new dates have not been set.


Some disruption but impact is limited compared to other discretionary players.

  • We lower our Thai Beverage's FY20F-22F (Sep) earnings by a modest 3-4% amidst the latest alcohol ban. We think 1HFY20F earnings would stay healthy as the group has already reported a strong 1QFY19 PATMI of THB8.4bn while industry sales have remained decent up to Feb 2020.
  • For the period of 1 Oct 2019 to 29 Feb 2020, Thailand’s domestic beer sales have grown 7.4% y-o-y. In addition, there were media reports of consumer stocking up on alcoholic beverages ahead of the ban, suggesting that alcohol sales could still be propped up in early April. Since c.60-70% of its products are consumed off-premise, we think the impact to Thai Beverage would be limited relative to products consumed on-premise.


YTD correction presents opportunity for longer-term investors.






Juliana Cai RHB Securities Research | https://www.rhbinvest.com.sg/ 2020-04-16
SGX Stock Analyst Report BUY MAINTAIN BUY 0.79 DOWN 0.920



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