Thai Beverage - CGS-CIMB Research 2021-05-14: 2Q21 Saved By Costs

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

Thai Beverage - 2q21 Saved By Costs

  • Thai Beverage's 1HFY21 net profit of THB14.4bn (-0.4% y-o-y) was in line at 53.8%/54.8% of both our and consensus’ FY21F net profit of THB26.7bn/THB26.2bn.
  • Cost savings were still the saviour, mitigating 1H revenues that fell 4.3% y-o-y. We trim FY21-23F earnings per share forecast as we opt to be conservative on forward margins.
  • Although its beer IPO has been delayed, we still like Thai Beverage's defensive domestic Thai spirits business. Reiterate ADD with a lower SOP-based target price of S$0.84.



Thai Beverage's 1HFY21 cost controls again to the rescue

  • Thai Beverage (SGX:Y92)’s 1HFY21 (Oct 2020 to Mar 2021) revenue fell 4% y-o-y to THB131.3bn, largely on declines in its beer, non-alcohol and food revenues which fell 5.1%, 12.6% and 19.9% y-o-y, respectively. However, lower distribution (-~13% y-o-y) and administrative (-~11% y-o-y) costs in the 1H again led to better 1H21 EBIT margins (15% vs 13.3% in 1H20), keeping Thai Beverage’s core net profit mostly intact (-0.4% y-o-y).


Steady spirit volumes mitigate beer and non-alcohol volume falls

  • Overall 1HFY21 spirit volumes showed resilience, falling -1.2% y-o-y, as Thai Beverage’s Thai white spirits (a result of downtrading behavior, in our view) continued to mitigate the falls in its Thai brown spirits and Myanmar spirit volumes.
  • 1HFY21 beer volumes fell ~5%, largely on declines in Thai volumes (-~7.9% y-o-y) following a resurgence of new COVID-19 cases in Thailand in late-Dec 20).
  • Non-alcoholic beverage volumes fell 14.6% y-o-y.


Trim Thai Beverage's FY21-23F earnings per share forecast by 2.7%-3.2%

  • We opt to be conservative on Thai Beverage’s near-term prospects as we think there is potential that revenue growth could slow down with tightening measures being implemented from Apr 21 onwards due to COVID-19.
  • We also think the lower revenues will lead to operating deleverage which could also put pressure on our forward EBIT margins. We cut our Thai Beverage's FY21-23F earnings per share forecast by 2.7%/3.2%/3.1%.


Reiterate ADD on Thai Beverage






Cezzane SEE CGS-CIMB Research | https://www.cgs-cimb.com 2021-05-14
SGX Stock Analyst Report ADD MAINTAIN ADD 0.840 DOWN 0.870



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