THAI BEVERAGE PUBLIC CO LTD (SGX:Y92)
Thai Beverage - Still In Good Spirits
- Thai Beverage (SGX:Y92)'s results in line, with 9M21 revenue and EBITDA at 72%/75% of our FY21e forecasts.
- Spirits stole the limelight with a 21% y-o-y EBITDA surge, as volume recovered and costs were contained.
- Maintain BUY on Thai Beverage with target price of S$0.86, at 18x FY21e earnings, its 5-year average.
- Restricted on-premise consumption of beer and closure of F&B outlets to be compensated by resilience of spirit business together with aggressive cost-control. Spirits account for around 90% of PATMI. Catalysts expected from removal of lockdown measures in Thailand and Vietnam.
Thai Beverage's 3Q21 - The Positive
Resilient spirits.
- Volumes rebounded 18.5% y-o-y to 161mn litres. The comparable period last year was weaker due to a 1-month alcohol ban in Thailand. q-o-q, volumes declined 2.2%. Volume resilience can be explained by typical off-premise consumption for spirits, workers returning to villages from cities and white spirits’ better affordability than other alcohols. Margins expanded from lower selling expenses.
Thai Beverage's 3Q21 - The Negative
Sluggish food sales.
- While food earnings rebounded sharply from a year ago, food’s THB163mn EBITDA was substantially below its pre-pandemic quarterly run rate of THB470mn. Dine-in restrictions curbed revenue growth and kept the division in net losses.
Outlook
- The ongoing closure of entertainment venues and restaurants in Thailand will continue to affect beer and food outlets, in our view. Beer is mainly consumed on-premises, unlike spirits. The upside surprise is Thai Beverage’s ability to control costs aggressively to adapt to the current environment.
Maintain BUY with unchanged target price of S$0.86
- Our target price for Thai Beverage stays at S$0.86, based on 18x FY21e earnings, its 5-year average.
- See
Paul Chew
Phillip Securities Research
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https://www.stocksbnb.com/
2021-08-23
SGX Stock
Analyst Report
0.860
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