Thai Beverage’s 54%-owned Vietnamese beer-subsidiary, Sabeco, reported its 1Q23 results with revenue and PATMI dropping sharply, dragged by front-loading in 4Q22 and a gloomy economic outlook.
Despite higher tourist arrivals to Thailand, we reckon there is downside to our current beer segment estimates. Our estimates for the other segments remain unchanged.
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Negative read-through from SABECO's financial.
Thai Beverage (SGX:Y92)’s 54%-owned Vietnamese beer-subsidiary, Sabeco, reported its 1Q23 results with revenue (-15.0% y-o-y) and PATMI (-17.4% y-o-y) falling. It was noted that a post-holiday slowdown, strict drink driving laws and global economic uncertainty led to slower consumption.
- Read this at SGinvestors.io -
In our view, given that Sabeco has historically been a reliable leading indicator and contributes around 55-60% of beer revenue, the slowdown in Vietnam’s beer consumption is expected to drag Thai Beverage's beer segment for 2QFY23.
Along with fierce competition in Thailand's domestic beer market, we reckon that there are earnings downsides to our current estimates for Thai Beverage and expect 2QFY23 beer revenue/EBITDA to fall y-o-y.
Improved tourist arrivals.
Read more at SGinvestors.io.
Above is an excerpt from a report by UOB Kay Hian Research. Clients of UOB Kay Hian may be the first to access the full PDF report @ https://www.utrade.com.sg/.
