Thai Beverage (SGX:Y92)’s 1QFY26 revenue declined 6% y-o-y to THB86.7bn, while EBITDA rose 1.8% y-o-y to THB16.7bn. Spirits sales grew 3.5%, offset by a 14.4% decline in beer sales and an 8.6% decline in non-alcoholic beverage (NAB) sales.
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Profitability improved
Despite weaker top-line, profitability improved, led by a turnaround in spirits, partially offset by weaker NAB profitability.
Spirits delivered 6.9% y-o-y EBITDA growth, supported by higher volumes and lower marketing spend, likely reflecting the absence of new brand launches.
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Our views
1QFY26 EBITDA came in at 28.1% of our FY26F estimate, broadly in line with the average 1Q contribution in 1QFY24 and 1QFY25 of 28.4%. With profitability tracking in line with our expectations, we believe the company remains on course to deliver 9% EPS growth in FY26.
We noted that valuations across global major alcobev peers have re-rated from 13x in early 2026 to around 15–16x forward P/E currently as investors rotate into laggards with reasonable entry valuations and stable earnings growth profiles.
Accordingly, we believe with Thai Beverage's share price trading at ~10x forward P/E, the stock appears well-positioned for a similar level of re-rating, provided it executes and delivers on our high single-digit growth forecast.
Projecting 9.4% y-o-y earnings growth in FY26F on normalised operations and lower input costs.
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
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