Thai Beverage PLC’s (ThaiBev) 1QFY17 results were broadly within our expectations amid a weaker consumer environment and promotional activities were postponed due to the mourning period in Thailand. Keep in mind that 4QCY16 is typically the peak season.

Revenue was down 8% YoY to THB46.8b, forming 24% of our FY17F estimate, as sales declined across the segments – Spirits (-11%), Beer (-4.6%), Non-alcoholic Beverages (-1.3%) and Food (-1.0%).

Spirits’ net profit was also down 8% to THB5.1b as trade activities did not resume right after the first 30 days suspension of entertainment activities, which was encouraged by the government.

Nonetheless, on a broader picture, lower selling and administrative expenses, higher net profit of beer business and share of profit from associates helped PATMI increase 28% to THB7.7b to constitute 29% of our full year estimate.

Pending more information from the analyst briefing this evening, we are keeping our BUY rating, with fair value estimate of S$1.01 unchanged for now.

Source: OCBC Research - 15 Feb 2017