Thai Beverage 1HFY23 Earnings Preview - UOB Kay Hian 2023-05-11: Beer Segment Facing Headwinds

• 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.
• - Read this at SGinvestors.io -

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.

Llelleythan Tan Yi Rong UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-05-11

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