• ThaiBev’s 3Q18 results weak as expected.
• Domestic recovery elusive though we remain hopeful of sequential recovery on signs on farm income uptick.
• Spirits volume declined while Beer was not as weak as expected.
• ThaiBev’s share price could remain volatile; BUY for long-term potential.

What’s New

3Q18 weak as expected.

ThaiBev’s 3Q18 results was weak as expected. Headline net profit registered a drop of 61% y- o-y largely due to the absence of fair value gains recognised by its associate (F&N, SGX:F99) on an investment in Vinamilk. This amounted to THB8.5bn. Excluding that, core net profit would have declined by 11% y-o-y to THB6bn, largely due to weaker than expected performance from its Spirits business.

Group revenue was THB60.7bn, an increase of 34.1% y-o-y, on the back of increased contribution in beer (+105.2% y-o-y) due to acquisition and consolidation of Saigon Beer (Sabeco), food business (+109.7%) but offset partially by decline in its Spirits revenue (-3.3%) and Non-Alcoholic Beverages (-2.7%).

Source: DBS Research - 15 Aug 2018