Thai Beverage - RHB Invest 2024-08-16: Beer Business Leads Growth; Maintain BUY

• We remain positive on Thai Beverage (SGX:Y92) due to its strong market leadership in Thailand and Vietnam, and it being a beneficiary of the economic recovery in both countries. We expect consumption to recover in the two nations, delivering the group’s earnings growth into FY25F.
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3QFY24 net profit in line.

• Thai Beverage's 3QFY24 revenue came in at THB69bn (+2.4% y-o-y) while EBITDA amounted to THB12bn (-3.2% y-o-y) – which are within expectations. Revenue growth was led largely by the beer, food and non-alcoholic business segments, which grew +8%, +4% and +3% y-o-y to THB31bn, THB5.2bn and THB5.6bn on sales volume increases.
• Its non-alcoholic unit’s revenue grew 3.3% y-o-y to THB6bn on higher sales volume, led by brand building and warmer weather. The spirits segment’s revenue declined to THB27bn (-4.3% y-o-y), where volume sales dropped 2.7% y-o-y on a 9-month basis.
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• Overall, EBITDA margin shrank to 16.9% (-1.0ppts vs 17.8% in 3QFY23), albeit lifted by the beer business as a result of the division’s more effective brand investment and marketing activities.

Largely neutral impact on recent share swap exercise.

• Read more at SGinvestors.io.

Alfie Yeo RHB Securities Research | https://www.rhbgroup.com/ 2024-08-16 SGinvestors.io

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