Thai Beverage - OCBC Investment 2021-02-18: Proposed Spin-off Listing Of Its Beer Business

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

Thai Beverage - Proposed Spin-off Listing Of Its Beer Business

  • Total sales volume fell 10.5% y-o-y.
  • Spirits remained resilient.
  • Beer’s net profit improved 91.2% y-o-y on prudent cost control.



Thai Beverage's 1QFY21 results broadly in-line with expectations

  • Thai Beverage (SGX:Y92)’s 1QFY21 (Oct 2020 to Dec 2020) revenue decreased by 5.1% y-o-y to THB 71.8b due to weaker sales from Beer, Nonalcoholic and Food business, while Spirits’ revenue grew marginally at 1% y-o-y.
  • Total sales volume was down 10.5% y-o-y, impacted by
    1. resurgence of COVID-19 in Thailand;
    2. adverse weather conditions in Vietnam;
    3. a later Tet; and
    4. new drunk driving law in Vietnam.
  • Net profit, however, increased by 3.6% y-o-y to THB 9.5b while PATMI was up 0.5% y-o-y to THB 8.5b in 1QFY21, which translates to 31% of our initial full-year forecast, generally in-line with our expectations.


Spirits remained resilient due to its off-premise consumption nature

  • In terms of Thai Beverage's segment performance, Spirits remained resilient due to its off-premise consumption nature and strong product portfolio and distribution network. Its 1QFY21 revenue was up 1% y-o-y while net profit grew 3.2% y-o-y on lower operating expenditure.
  • While Beer saw a 9% decline in sales revenue, net profit improved 91.2% y-o-y, thanks to lower advertising and promotion expenses, staff costs and the adoption of TFRS 16 financial reporting standard.
  • For the non-alcoholic beverage segment (NAB), 1QFY21 revenue fell 12.0% y-o-y on lower sales volume (-13.1% y-o-y), but net profit improved 16.2% y-o-y due to lower transportation costs.
  • Separately, the Food business was weak due to bans on dine-in at restaurants and closure of department stores and restaurants. For 1QFY21, the Food business posted a 19.3% and 90.3% y-o-y decline in revenue and net profit respectively.

Proposed listing of BeerCo could help unlock values and pare down debt of ThaiBev






Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2021-02-18
SGX Stock Analyst Report BUY MAINTAIN BUY 0.91 UP 0.890



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