Since the news of Thailand‘s prince Maha Vajiralongkorn’s ascent to the throne, Thai Beverage’s share price has been down ~3%.

Separately, Vietnam’s largest brewer Sabeco, which Thai Bev reportedly expressed interest in buying a stake in, saw its share price rise by the maximum allowed 20% on thin volume on its first day of listing yesterday on Ho Chi Minh Exchange. The government seeks to sell its entire ~89% stake in Sabeco by 2017.

Amid such developments, we reiterate that there could be some near term weakness for the stock, especially as advertising activities typically planned for 4QCY16 (1QFY17) would be postponed, albeit this may translate to lower expenses.

We still like the group’s long term growth story and diversification plans, which can potentially be accelerated by a corporate restructuring, slated to happen next year.

Thus we maintain BUY at current price levels, with fair value estimate of S$1.01.

Source: OCBC Research - 7 Dec 2016