In our earlier report on Thai Beverage, 1HFY17 results were within our expectations, with revenue down 8.4% to THB97.2b and PATMI marginally down 1.8% to THB14.3b. Following the earnings call, we note that Beer’s market share has maintained at 40%, and core brands under Non-Alcoholic Beverages remain steady and strong with Oishi and Crystal as market leaders.

While the new excise tax formula was announced in Mar this year, more details need to be released before we might expect potential reactions such as possible price increases and/or agents stocking up pre excise tax implementation. Details should be released prior to 18-Sep, the expected date of implementation.

Meanwhile, consumer sentiment is anticipated to remain soft over the year-long mourning period. As such, management will be focusing on cost control and profitability for the remaining of FY17 (Year-end Sep). We also wait for progress on the upcoming corporate restructuring.

We continue to keep our BUY and fair value estimate of S$1.01 on the basis of a positive growth story and look beyond FY17.

Source: OCBC Research - 15 May 2017