• Chang’s new look helped
• NAB losses may narrow
• Total DPS of THB0.61 maintained

FY15 results met expectations

Thai Beverage PLC’s (ThaiBev) FY15 results met our expectations. Revenue was up 6.2% to THB172.0b, meeting 101% of FY15F estimate. This was underpinned by growth in sales of Spirits (+1.3%), Beer (+22.5%) and Nonalcoholic Beverages (+4.5%), but Food sales declined marginally by 0.4%.

PATMI of THB26.5b formed 98% of our full year estimate, which included the THB3.8b gain from disposal of Myanmar Brewery Limited in 3Q. Net profit from continuing operations rose 5.5% to THB22.6b, on the back of 207% growth in net profit for Beer and 40.5% for F&N/FCL.

Beer segment gained market share

Following efforts to consolidate their beer brands coupled with repackaging efforts made in 3Q15, the Beer segment outperformed in 4Q with a ~60% YoY growth in sales. The segment enjoyed higher sales volume, price, lower raw material price and higher utilization rate, offset by an increase in staff costs and promotional expenses.

Full year net profit rose 206.8% to THB1.2b. In addition, management cited third party research that showed a gain in total market share (Chang and Archa) on a monthly basis from 30% to 38%. We understand that there is still room for a gradual increase in market share.

Looking ahead

Looking ahead,

1) NAB losses may narrow, as FY15 included the launch of 100+, Jubjai, and efforts in Malaysia from Oishi, while there will not be any major product launches for FY16.

2) The group could see an excise tax hike this year, but they ultimately view the macro-economic conditions as the main factor behind results.

3) We understand from management that the corporate restructuring, which has been in talks, is also likely to happen this year.

We could see a clearer alignment of business on the shareholdings front, while this should not have a material impact on business development. Separately, the group is considering a change in ThaiBev’s fiscal year-end from Dec 31st to Sep 30th, to match Fraser and Neave’s fiscal yearend, subject to approvals.

Maintain BUY

We are keeping our BUY rating, with our DCF derived fair value estimate of S$0.83 unchanged. The group also kept its final DPS of THB0.46, bringing total DPS to THB0.61, similar to last year’s.

Source: OCBC Research - 1 Mar 2016