Equity Analysis /

Thailand: Beverage - Better, but not the best

  • Better outlook, but not the best

  • A stable market share for CBG; OSP to struggle to rebuild share

  • We prefer CBG over OSP

Bualuang Securities
8 December 2022

We expect Beverage coverage earnings to rise YoY in 2023, but they won’t recover to 2019-21 levels, due to higher costs. We prefer CBG over OSP, due to its stronger earnings outlook and profitability metrics.

Better outlook, but not the best

Our 2023 Beverage coverage earnings growth forecast is 20% YoY, supported by lower cost pressures (mostly aluminum for packaging; also natural gas), export growth, and new product launches. We assume Thailand energy drinks market value of Bt19.76bn in 2022, up 3% YoY, and Bt20.55bn in 2023, up another 3% YoY, supported by substantially heavier construction and logistics activity in Thailand and new product launches. That said, our 2023 market value assumption is 8% below the 2019 number, due to tough competition among beverage categories (energy drinks, functional drinks, ready-to-drink tea, etc). Our NEUTRAL sector call stands.