- Thai Beverage (SGX:Y92)'s 1H23 revenue and PATMI at 49%/52% of our FY23e forecasts. 2Q23 PATMI growth of 3.4% was driven by growth in spirits but dragged down by a major decline in beer earnings.
- 2Q23 beer volumes were down 10% y-o-y. Sabeco volume declined by double-digits due to distributors de-stocking and slowdown in economic growth. Consumer sentiment in Vietnam is weak, especially for the industrial sector.
- - Read this at SGinvestors.io -
- Our recommendation is upgraded from ACCUMULATE to BUY due to recent weakness of Thai Beverage's share price. The target price of S$0.80 is unchanged.
The Positive
Better product mix and selling price for spirits.
- - Read this at SGinvestors.io -
- There remain ample production capacity in spirits and capital expenditure is minimal. Raw material cost from molasses is expected to rise this year based on the recent Dec22-Apr23 annual harvest.
The Negative
Beer volumes first decline in six quarters.
- Read more at SGinvestors.io.
