Key Research Idea

Thai Beverage (THBEV SP) – Weak 4QFY21 but reopening could drive volume recovery  

Thai Beverage PLC’s (ThaiBev) FY21 results came in below our expectations on lower than expected sales volume in 4QFY21 due to Covid-19 restrictions. Revenue decreased by 5.1% to THB 240.5b, while core PATMI was down 3.0% to THB 24.6b in FY21. A full-year dividend of 0.50 Baht per share was declared as compared to 0.46 Baht in FY20, at dividend payout ratio of 51%. Demand for Spirits in 4QFY21 was impacted by lockdowns and lower income support from the government in Thailand, as well as a higher base in 4QFY20. On a full-year basis, Spirits business remained more resilient than Thaibev’s other business segments. For Beer, ThaiBev gained 2% market share in Thailand despite lower sales volume and lower marketing and promotion expenses in FY21. Management mentioned that they have started its price adjustments in Oct 2021 with price increment for white spirits. Management plans to increase prices gradually over the next two quarters to manage higher material costs. After adjustments, our fair value estimate decreases from SGD0.91 to SGD0.88. BUY(Chu Peng)