THAI BEVERAGE PUBLIC CO LTD (SGX:Y92)
Thai Beverage - Defensive Despite Challenging Times
On track to deliver; Maintain BUY
- Thai Beverage (SGX:Y92)'s 9MFY21 EBITDA of THB36.6b (+11.5% y-o-y) met MKE but was ahead of consensus estimates at 77/82%. Despite stricter COVID-19 restrictions, Thai Beverage’s results continued show resilience on the back of its prudent cost control and strength of its distribution network.
- We continue to like Thai Beverage’s portfolio of top, mass-market brands in Thailand with 90%/40% spirits/beer market share and 43% in Vietnam. We maintain our BUY rating with target price of S$0.99, pegged to 20x FY21E P/E.
Rising spirits sales volume
- Thai Beverage's 9MFY21 revenue of THB131.3b (+1% y-o-y) was in line with MKE/consensus estimate. This is mainly driven by a 3.6% y-o-y rise in spirits revenue on the back of a 4.2% increase in sales volume of spirits, as well as a 1.2% y-o-y uptick in beer segment. Its spirits business continued to remain resilient despite temporary closure of entertainment venues and restaurants in Thailand given off-premise (at home) consumption nature.
- Also, spirits EBITDA grew 9.5% y-o-y to THB23.6b on reduction of selling expenses in both Thailand and Myanmar, and remained the biggest profit driver (65% of total EBITDA).
Beer business: margin expansion continues
- Total sales volume has eased 1.1% y-o-y due to a decrease in SABECO’s sales jumped 20.4% y-o-y to THB10.6b.
Strong brands with cheap valuation
- Thai Beverage continued to trade at 15x FY21E P/E, which is -1 standard deviation below its historical average.
- See
- We believe subsequent net margin expansion from its beer division and the post-COVID consumption recovery could help narrow the P/E gap. Thai Beverage's portfolio of top mass-market brands is also well positioned to capture post-COVID recovery, driven by easing restrictions of on-premise consumption.
Kareen Chan
Maybank Kim Eng Research
|
https://www.maybank-ke.com.sg/
2021-08-16
SGX Stock
Analyst Report
0.990
SAME
0.990
