Jeffrey Tan Published on Tue, Aug 17, 2021

Thai Beverage (ThaiBev) has continued to be a favourite among analysts following the beverage manufacturer’s positive 9MFY2021 results ended June 30.

On Aug 13, ThaiBev reported revenue grew 1.1% y-o-y to THB192.12 billion ($7.80 billion) and earnings before interest, tax, depreciation and amortisation (Ebitda) jumped 11.5% y-o-y to THB36.64 billion.

In a note dated Aug 16, Maybank Kim Eng has retained its “buy” rating for the stock with an unchanged target price of 99 cents.

The brokerage says ThaiBev’s results continued to show resilience on the back of its prudent cost control and strength of its distribution network despite stricter Covid-19 restrictions.

It adds that the company’s portfolio of top mass-market brands is well-positioned to capture post-Covid-19 recovery, driven by easing restrictions of on-premises consumption.

“We continue to like ThaiBev’s portfolio of top, mass-market brands in Thailand with 90%/40% spirits/beer market share and 43% in Vietnam,” Maybank KE analyst Kareen Chan says.

UOB KayHian, too, has reiterated its “buy” recommendation for the stock with an unchanged target price of 92 cents.

It notes that ThaiBev’s spirits business’ Ebitda margins remained stable, while earnings will likely remain robust.

“On valuation grounds, the counter remains attractively priced, at one standard deviation to its mean price-earnings ratio, while earnings are robust in nature and largely underappreciated by the market,” UOB KH analyst Lucas Teng writes in an Aug 16 report.

Meanwhile, CGS-CIMB Research has maintained its “add” recommendation for the stock with an unchanged target price of 84 cents.

The brokerage says it continues to like ThaiBev for its strong market share in Thai spirits business and its continued drive to gain market share over the long term in Vietnam’s beer market.

“Amid tighter Covid-19 restrictions, we like ThaiBev’s defensiveness, given its strength in off-trade channels and strong product portfolio,” CGS-CIMB analyst Ong Khang Chuen writes in an Aug 13 report.

Finally, DBS Group Research has kept its “buy” call for the stock albeit with a lower target price of 92 cents from 93 cents previously.

The brokerage says ThaiBev’s FY2021 earnings are still expected to grow y-o-y as it believes the company’s cost cutting measures would offset the weaker sales volumes.

However, CGS-CIMB says the cost savings is unliked to be sustained indefinitely and thus it has lowered its FY2022 earnings forecast by 6%.

“As a result, our valuation of ThaiBev’s core business was slightly reduced which led to a small revision in our target price,” DBS analysts Woon Bing Yong and Paul Yong write in an Aug 16 report.

As at 12.37 pm, ThaiBev was down 0.5 cent or 0.7% at 68 cents, with a FY2021 P/B of 2.64 times and a dividend yield of 3.17%, according to CGS-CIMB’s estimates.