• Reiterate BUY with an unchanged SGD0.92 Target Price, 11% upside plus 2% yield.
• Thai Beverage (SGX:Y92) is one of our Top Picks amongst the Singapore-listed consumer stocks.
• Thailand’s April statistics suggest that domestic beer consumption has continued to improve, which should bode well for the group. Aside from alcohol demand recovery, we also favour Thai Beverage due to the strength in the THB and also its valuation gap to other Thai-listed peers. We expect Thai Beverage's share price to perform well when results deliver.

Positive Stats for Beer

• The latest statistics from Thailand’s Office of Industrial Economics revealed that domestic beer consumption was up 21% y-o-y in April, a sharp turnaround from the slow demand growth in March. We note that the inclusion of Sabeco and exports could have distorted Thai Beverage’s y-o-y numbers, but – on a 7-month basis (Oct 2018-Apr 2019) – the kingdom’s beer consumption has grown 9% y-o-y.
• We believe Thai Beverage will grow in tandem, given that it is the second-largest beer player in the market with a 40% market share.

Upbeat on Thailand Retail Outlook

• Thailand retail sales remained strong and were up 12% y-o-y in the last two quarters. While farm income was stable, we believe the economic stimulus package – including state welfare cards to 14.5m low-income earners and personal income tax deductions – should help boost domestic spending.

Strength in the THB

• We estimate 85% of Thai Beverage’s PATMI is derived from Thailand. YTD, the THB/USD has appreciated 4% while regional currencies stayed flattish. Amidst market uncertainties revolving around US-China trade tensions, we favour Thai Beverage over other Singapore-listed consumer companies, given the strength of the THB compared to regional currencies.

Source: RHB Invest Research - 13 Jun 2019