- We continue to like Thai Beverage for its strong market leadership in Thailand and Vietnam, and as a beneficiary of Thailand’s economic recovery as well as the return of tourists to Vietnam, post COVID-19. We also see earnings growth driven by better sales as consumption recovers.
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- Valuation is undemanding, with the stock trading at ~12x blended FY23- 24F P/E, at around -1.5 standard deviation from its historical forward mean P/E of 18x.
3Q23 in line.
- Thai Beverage (SGX:Y92)'s 3Q23 (Apr to Jun 2023) revenue of THB67bn (+4% y-o-y) and EBITDA of THB12bn (-2% y-o-y) were within expectations. Revenue growth was mainly driven by the spirits business, which grew 12% y-o-y to THB29bn (better sales volumes), offset by the beer business (lower sales volumes), which fell 6% y-o-y to THB29bn.
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Margin dragged by beer & food businesses
- EBITDA margin stood at 17.8% (-2.2ppts vs 19% in 3Q22), dragged by the beer (-3.1ppts to 13%) and food businesses (-3.5ppts to 10%), but mitigated by better margins in the spirits (+0.4ppts to 25%) and non-alcoholic beverages (+3.5ppts to 10%) segments.
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