Earnings Report /

Thai Beverage: Recovery except for spirits

  • Beer recovered on both volume and price increases

  • Our target is pegged at 18x FY22e earnings, its 5-year average

  • No change to our FY22e forecast

Paul Chew
Paul Chew

Head of Research

15 August 2022
Published byPhillipCapital

The Positive

+ Volume and price bounce for beer. Beer sales rebounded strongly with a 16% YoY growth. The volume recovery is from lockdowns a year ago, namely in Vietnam. Price increases, product mix and lower sales and marketing costs supported the expansion in EBITDA margins to a record 16.1%. Pre-pandemic EBITDA margins were around 10%.

The Negative

- Spirits down after strength a year ago. Volumes were down 14% YoY to 138mn litres. Seasonally, third-quarter volumes are the weakest. The 138mn litres is a tad above 3Q21’s 136mn litres, which included a 1-month alcohol ban in Thailand. We believe the weak volumes stem from poor sales and currency in Myanmar and lower consumption of on-premises brown spirits.  


We expect the overall recovery from lockdowns and weaker economic conditions to continue. Price increases implemented over the past few quarters together with the rolling over of commodity prices should support a gross margin recovery. Operating margins may suffer if the company resumes marketing activities that were significantly cut over the past two years.

Upgrade to BUY from ACCUMULATE with an unchanged TP of S$0.80

Our target price is maintained at S$0.80, based on 18x FY22e earnings, its 5-year average.