Trader Hub

Author: traderhub8   |   Latest post: Mon, 6 Feb 2023, 11:40 PM


Thai Beverage PLC – Beer Leading the Recovery

Author:   |    Publish date:

  • 1H22 revenue and PATMI beat our expectations, at 55%/62% of our FY22e forecasts. 2Q22 PATMI rose 20% YoY to THB7.1bn. Interim dividend was unchanged at THB0.15.
  • Driving earnings growth was a 3-fold recovery in beer and associates PATMI. Spirits earnings were down 3% YoY to THB5.4bn due to a higher mix of white spirits. Spirits accounted for 75% of group PATMI.
  • We maintain our ACCUMULATE recommendation. Our FY22e earnings is raised 5% to THB27.6bn. The target price is raised from S$0.765 to S$0.80. Valuation is based on 18x earnings, its 5-year average. FY22e will be a recovery from pandemic lockdowns last year. The pace of the recovery will depend on entertainment outlets reopening in Thailand.


The Positives

+ Beer bounces back. Beer earnings surged as volumes jumped 11% YoY to 553mn litres. Volumes remain 24% below pre-pandemic levels in 2Q19. Another driver of revenue growth was the low (Thailand) to high (Vietnam) single-digit price increases on beer during the quarter. Sabeco raised prices in December 2021 and April 2022.


+ Margins stable despite cost pressure. THBEV continues to keep a lid on operating expenses. 2Q22 administration expenses declined 2.6% YoY to THB3.8bn or 5.8% revenue (2Q21: 6.5%). This is below the pre-pandemic run-rate of around 11%. Despite the raw material cost pressures, gross margins were stable at around 29.7%. The price increase and higher volumes supported margins.  



The Negative

– Weaker spirits revenue. 2Q22 spirit volumes expanded for the second consecutive quarter, rising 4% YoY to 172mn litres (1Q22: +8.6% YoY). Volume this quarter jumped from forward loading by distributors ahead of a price increase of white spirits in February. Consequently, revenue was flat YoY due to a higher mix of white spirit sales.



The re-opening of entertainment outlets in Thailand will determine the pace of recovery for THBEV. A complete re-opening will boost beer and brown spirits consumption for the company. Sabeco beer volumes will rebound from the lockdowns a year ago.

We expect spirits earnings to grow modestly in 2H22, supported by price increases in November 2021 and February 2022 of 4-6%. Margins could creep up from lower molasses cost. The sugar cane crop in Thailand is up around 40% from a year ago, helping to lower prices.

Source: Phillip Capital Research - 17 May 2022

Share this
Labels: ThaiBev

Related Stocks

Chart Stock Name Last Change Volume 
ThaiBev 0.64 0.00 (0.00%) 9,185,600 

  Be the first to like this.

I3 Messenger
Individual or Group chat with anyone on I3investor

215  150  213  788 

Top 10 Active Counters
 Sembcorp Marine 0.111+0.002 
 Jubilee 0.076+0.015 
 HSI 20600MBeC.. 0.072+0.007 
 HSI 18400MBeP.. 0.048-0.009 
 HSI 21000MBeC.. 0.086+0.006 
 HSI 18200MBeP.. 0.077-0.008 
 HSI 22200MBeC.. 0.066+0.005 
 Singtel 2.410.00 
 HSI 21800MBeC.. 0.059+0.006 
 HSI 22600MBeC.. 0.035+0.006