THAI BEVERAGE PUBLIC CO LTD (SGX:Y92)
Thai Beverage - Gradual Recovery Ahead
- Resilient Spirits sales.
- Food business saw greater impact from COVID-19.
- Domestic beer market share reached 12- year high.
Thai Beverage's FY20 results beat expectations
- Thai Beverage (SGX:Y92)’s FY20 revenue decreased by 5.2% y-o-y to THB 253.5b due to weaker sales from Beer, Nonalcoholic and Food business, partially offset by an increase in sales of Spirits. Net profit fell marginally by 0.1% y-o-y to THB 26.1b while PATMI was down 2.2% y-o-y to THB 22.8b in FY20, which translates to 106% of our full-year forecast.
- A full-year dividend of 0.46 Baht per share was declared as compared to 0.48 Baht in FY19.
Spirits remained resilient despite impact from COVID-19
- Spirits’ FY20 sales revenue and net profit rose 2.2%/14.7% y-o-y to THB 117.3b and THB 22.3b respectively. Despite the impact of temporary ban on alcoholic beverage sales in Thailand and the closure of entertainment venues and restaurants, Spirits business remained resilient due to its off-premise consumption nature and strong Spirits product portfolio and distribution network.
- For Beer, its market share in Thailand reached the highest in 12 years despite lower revenue (-11.3% y-o-y) and the impact of COVID-19.
- Separately, the Food business posted a 15.4% y-o-y decline in revenue to THB 13.2b and net loss of THB 101m (vs. net profit of THB 472m in FY19) due to bans on dine-in at restaurants and closure of department stores and restaurants.
- The non-alcoholic beverage segment’s (NAB) revenue was down 3.1% y-o-y to THB 16.3b while net income turned from a loss of THB 998m in FY19 to a profit of THB 656m in FY20 on prudent cost control.
Valuations undemanding
- Thai Beverage is currently trading at a blended forward P/E of 15.3x which is near 1 s.d. below its 5-year average of 15.4x. We think the valuation is undemanding given the positive development of vaccines, Thai Beverage’s strong brand name and product portfolio, and policy stimulus from the government which could aid the recovery of consumption.
- See Thai Beverage Share Price; Thai Beverage Target Price; Thai Beverage Analyst Reports; Thai Beverage Dividend History; Thai Beverage Announcements; Thai Beverage Latest News.
- After adjustment on sales volume and cost assumptions, our fair value estimate for Thai Beverage increases from S$0.75 to S$0.89. Maintain BUY.
Chu Peng
OCBC Investment Research
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https://www.iocbc.com/
2020-12-08
SGX Stock
Analyst Report
0.89
UP
0.750
