ThaiBev is Thailand’s largest and one of Southeast Asia’s largest beverage companies. THBEV has a 28.5% stake in SGX-listed Fraser & Neave Ltd (FNN SP) and a 28.3% stake in Frasers Property Limited (FPL SP). It also has a 53.6% stake in Saigon Beer-Alcohol-Beverage Corporation (SABECO), Vietnam’s largest beer company. ThaiBev has a 90% market share of Thailand’s spirit market.
Strong 2Q22 performance. ThaiBev announced its 2Q22 (YE Sep) business update. Revenue in the quarter increased by 11% YoY to THB65.8bn. Net profit grew by 20% YoY to THB7.1bn. The stronger growth was driven by the recovery in the beer (+20.3% YoY sales) and food (+41.6% YoY sales) segments. Balance sheet also improved with net gearing dropping to 0.77x as of Mar-2021 vs 0.86x as of Sep-2021.
Resumption of proposed spin-off of BeerCo unit. Its wholly-owned subsidiary International Beverage Holdings, which holds all the issued ordinary shares of BeerCo, will conduct a public offering of up to 20% of the total number of issued ordinary shares of BeerCo. BeerCo has 3 breweries in Thailand and a network of 26 breweries in Vietnam. Its business includes the production, distribution and sales of beer including the Chang and Bia Saigon brands. BeerCo posted a net profit of S$104mn (+12.1% YoY) and revenue of S$1.16bn (+30.7% YoY) in 2Q22.
Positive consensus estimates. Consensus has 15 BUYS and 1 HOLD on ThaiBev, with an average TP of S$0.90, implying a 26.8% upside potential from the last close price. Earnings are expected to recover 7-15% per annum over three years, which would bring its forward P/E down to 15.8x/14.7x/13.6x FY2022/23/24F (YE Sep).
