Following Thai Beverage’s weaker-than-expected FY25 results, we cut our FY26- 27 earnings forecasts by 4% pa. We expect the operating softness to persist.
FY25 review - softness across the segments
- Read this at SGinvestors.io -
Spirits revenue slipped 2% y-o-y, caused by a 3% drop in sales volume, while segment profit fell 8% due to elevated SG&A costs. Beer revenue decreased 3% y-o-y amid continued weakness in Vietnam, but segment profit jumped 52% on sharply lower cost of goods sold.
Takeaways from management call
Management noted a Q4 spirits decline primarily due to geopolitical disruptions at the Thailand-Cambodia border and delayed consumer demand from prior-year overstock. Despite three years of declining spirits volumes, management sees no structural change, attributing the trend to lingering post-COVID economic weakness.
- Read this at SGinvestors.io -
In NAB, leadership in key categories is maintained, with local production in Cambodia to support growth.
Macro factors, including government stimulus and upcoming elections in Thailand, are expected to support consumption, while dividend policy remains at ≥50% of profits.
Limited catalysts keep us at HOLD; target price cut to S$0.43
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
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