Retailers in Thailand are reportedly hoping to benefit from the long term government stimulus announced last month. The government is said to be giving grants for low-income earners as well as a tax deduction on certain items while travelling within the country during the Songkran festival this month.

With concerns over local consumption spending, albeit partially offset by improving tourism numbers, these measures seem to bode well for consumer stocks, including Thai Beverage. According to OCBC Treasury Research, Thailand’s growth outlook remains positive for now with consumer confidence still firm at 74.7 as of Feb-16.

While the data is not all encompassing for the macro environment, we reiterate our BUY rating on Thai Bev for its relatively defensive alcoholic portfolio as well as its Vision 2020 strategic path towards diversifying its geographical presence and growing its non-alcoholic beverage segment.

Source: OCBC Research - 8 Apr 2016