Thai Beverage - UOB Kay Hian 2024-02-15: 1QFY24 In Line As Margins Improve

• Thai Beverage released its 1QFY24 business update whereby overall revenue fell 5.9% y-o-y, dragged by the beer segment. However, 1QFY24 EBITDA increased 1.9% y-o-y on more efficient A&P spending along with lower raw material costs.
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• In our view, Thai Beverage's share price is trading at an attractive -2 standard deviation to its mean P/E. Maintain BUY with the same SOTP-based target price of S$0.70.

Muted 1QFY24 in line with expectations.

• Thai Beverage (SGX:Y92) provided its 1QFY24 business update whereby overall revenue fell 5.9% y-o-y while overall EBITDA eked out a slight gain of 1.9% y-o-y, forming 28% and 34% of our full-year forecasts respectively.
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• However, 1QFY24 overall EBITDA was supported by better margins across the spirits, beer and non-alcoholic beverages (NAB) segments, driven by better cost management and efficient advertising and promotional (A&P) spending. As a result, 1QFY24 overall EBITDA margins grew 1.4ppt y-o-y.
• On a q-o-q basis, 1QFY24 overall revenue (+20.4% q-o-q) and EBITDA (+32.4% q-o-q) were higher sequentially, given that 1Q is Thai Beverage’s seasonally strongest quarter.

Robust balance sheet from continued deleveraging.

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Llelleythan Tan UOB Kay Hian Research | Heidi Mo UOB Kay Hian | https://research.uobkayhian.com/ 2024-02-15 SGinvestors.io

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