Thai Beverage - CGS-CIMB Research 2021-09-21: Looking For Happier Hours

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

Thai Beverage - Looking For Happier Hours

  • Consumption recovery in sight with easing lockdown measures in operating geographies and potential stimulus measures in Thailand.
  • Lockdown impact may be limited as Thai alcohol sales remained resilient in Jul 21. Thai Beverage is also adopting cost control measures to protect margins.
  • Thai Beverage's valuation undemanding at 14.6x CY22F P/E, 1.1 standard deviation below historical mean and at a 47% discount vs regional peers.



Reiterate ADD on attractive valuation and improving risk-reward

  • Reiterate ADD. We believe Thai Beverage (SGX:Y92)’s risk-reward profile is improving with easing lockdown measures in Thailand and Vietnam, which could aid consumption recovery in 1QFY22F (Oct 2021 to Dec 2021).
  • Thai Beverage trades at an undemanding valuation of 14.6x CY22F P/E (1.1 standard deviation below its 10-year historical mean), below regional peers’ 27.8x. We believe the current valuation has more than priced in near-term headwinds. Our SOP target price of S$0.84 implies 19.0x CY22F P/E (0.5 standard deviation above 10-year historical mean).
  • Potential catalysts include new stimulus measures to support consumer purchasing power in Thailand and better cost control. Resumption of BeerCo IPO plans could also be a medium-term catalyst, in our view.
  • Downside risks include prolonged lockdowns in Vietnam and Thailand.


Thai volumes resilient in Jul 21; Vietnam volumes slowed

  • Industry data suggests resiliency in Thai Thai Beverage should be relatively resilient vs peers, given:
    1. its strong presence in off-trade channels, and
    2. it being a potential beneficiary of down-trading, with its positioning as a mass player for beers in Thailand and Vietnam.


Prudent cost controls to tide through near-term headwinds

  • We forecast Thai Beverage achieving an EBITDA core net profit growth in 2HFY21F.


Consumption recovery in sight






ONG Khang Chuen CFA CGS-CIMB Research | https://www.cgs-cimb.com 2021-09-21
SGX Stock Analyst Report ADD MAINTAIN ADD 0.840 SAME 0.840



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