- Initiate coverage on Thai Beverage with HOLD and target price of S$0.45. We expect Thai Beverage's earnings to post a 3% CAGR over FY24-27E.
Limited growth catalysts.
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- Spirits and beer volumes are seen rising just 0.5% and 3% CAGR in FY24–27, with alcohol revenues up only 2% CAGR in FY25–27.
- NAB offers better growth (revenues/profit CAGR of 4%/6%) but remains a small profit contributor (~15% by FY27).
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High base, weak economy, taxes cap demand growth.
- Per capita alcohol intake in Thailand and Vietnam is 2-10x other emerging Asian markets, limiting per capita consumption growth. Moreover, Thailand’s persistent macro softness (2025E GDP growth 1.3–2.3%) and Vietnam’s regulatory tax hikes adds further pressure.
- Market share gains are capped by high concentration (80–90% for Thai Beverage spirits). We see FY25-27E alcohol segment revenues up just 2.0%.
- Premiumisation offers upside but is constrained by affordability and regulatory risk.
Steady NAB growth but profit uplift some time away.
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