We prefer OSP on low beta play against high market volatility due to its resilient earnings. Valuations are not expensive at a 2021 PER of 29.3x and a 2022 PER of 26.3x, below 30.5x of its mean since IPO in 2018. Our BUY rating stands at a YE21 DCF-derived target price of Bt40 (7.3% WACC, 2% terminal growth).
Offering new product initiatives to gain more market share
Given its highest share in Thailand’s energy drink market (54.9% in 1Q21) and functional drinks (34.9%), OSP has high potential to gain even higher market share in 2Q21 driven by many new product launches, M 150 ZA (carbonated energy drink), Lipo Fine (for woman), C-Vitt Big Pack (to boost in-home consumption at affordable price), C-Vitt Plus (premiumization with Collagen and Fiber), and M-150 X Tiger brand (SCC). Most importantly, OSP has stepped into Thailand’s flavored water market (Bt2.5-3bn market with high growth) with strong partner, Yanhee by distributing Yanhee vitamin B water nationwide.