Analysts at UOB Kay Hian (UOBKH) and DBS Group Research are keeping &ldquo buy&rdquo on Thai Beverage Y92 0.00%   (ThaiBev) following the company&rsquo s recently held Annual Information Meeting and analyst meeting.

 

In their June 23 report, DBS analysts highlight that the long-awaited BeerCo IPO remains part of ThaiBev&rsquo s strategic value unlocking agenda, as the company actively explores multiple options to maximise value for shareholders. One such option includes an equity partnering with a global brewer.

 

In terms of partnership, ThaiBev is looking out for strategic fit, valuation and culture fit, the analysts say. They note that the company is aiming for early to mid-2025, when market conditions are expected to improve on lower interest rates and US presidential election uncertainty is resolved.

 

As such, DBS believes that the BeerCo IPO is a key share price re-rating catalyst, adding that an equity partnership with a global brewer will be key to act as an anchor valuation. The frontrunner is likely to be Budweiser APAC, with its significant investment capacity. The analysts believe that Budweiser&rsquo s APAC&rsquo s global premium portfolio would complement ThaiBev&rsquo s existing mainstream focused portfolio. 

 

&ldquo Nonetheless, we believe Asahi should not be discounted as it has sufficient investment capacity to come in as a minority shareholder, which is preferred by ThaiBev&rsquo s management. In addition, it owns the second largest Japanese whisky company, Nikka, which has a global distribution network that ThaiBev could leverage on to grow its international premium spirits portfolio on a global scale,&rdquo the analysts point out.

 

Meanwhile, UOBKH analysts Llelleythan Tan and Heidi Mo point out ThaiBev&rsquo s possible divestments, as its stake in Frasers Property TQ5 0.00% has been earmarked as a non-core asset and may potentially be divested. However, they believe this is unlikely given Frasers Property&rsquo s share price being at an all-time low. 

 

&ldquo On the other hand, ThaiBev&rsquo s stake in Fraser and Neave (F& N) is considered a strategic investment given the operating synergies and collaborations with ThaiBev&rsquo s nonalcoholic beverages segment. However, management did mention that if the valuation was acceptable, the group would consider divesting its F& N stake,&rdquo they add.

 

In response to future growth drivers for the spirits segment, ThaiBev mentioned that the group has implemented a premiumisation strategy to attract a different customer profile and improve its international spirits portfolio. 

 

UOBKH analysts note that this was driven by the recent acquisitions of Larsen cognac and Cardrona Distillery in FY2023, which boast higher margins as compared with its domestic spirits stock-keeping unit (SKUs). Despite political tension in Myanmar, ThaiBev expects Grand Royal to continue its strong performance in FY2024.

 

Tan and Mo also expect ThaiBev&rsquo s beer subsidiary in Vietnam &mdash Sabeco &mdash to increase its average selling prices (ASPs) by 10%-15% in 2QFY2026 to pass on the higher excise taxes to customers. 

 

&ldquo In anticipation of the ASP hikes, we reckon that this would induce forward buying from customers, resulting in higher sales volumes in 4QFY2025/1QFY2026. However, beer sales volumes would likely normalise subsequently in 2QFY2026 as demand tapers off, although this may be mitigated by consumers down-trading to ThaiBev&rsquo s mass-market beer portfolio,&rdquo they note.

 

UOBKH has a lower target price on ThaiBev at 57 cents compared to 70 cents previously due to the re-rating of the company&rsquo s peer EV/ebitda multiples since its last update, while DBS keeps its target price at 69 cents.

 

Analysts at UOB Kay Hian (UOBKH) and DBS Group Research are keeping &ldquo buy&rdquo on Thai Beverage Y92 0.00%   (ThaiBev) following the company&rsquo s recently held Annual Information Meeting and analyst meeting.

 

In their June 23 report, DBS analysts highlight that the long-awaited BeerCo IPO remains part of ThaiBev&rsquo s strategic value unlocking agenda, as the company actively explores multiple options to maximise value for shareholders. One such option includes an equity partnering with a global brewer.

 

In terms of partnership, ThaiBev is looking out for strategic fit, valuation and culture fit, the analysts say. They note that the company is aiming for early to mid-2025, when market conditions are expected to improve on lower interest rates and US presidential election uncertainty is resolved.

 

As such, DBS believes that the BeerCo IPO is a key share price re-rating catalyst, adding that an equity partnership with a global brewer will be key to act as an anchor valuation. The frontrunner is likely to be Budweiser APAC, with its significant investment capacity. The analysts believe that Budweiser&rsquo s APAC&rsquo s global premium portfolio would complement ThaiBev&rsquo s existing mainstream focused portfolio. 

 

&ldquo Nonetheless, we believe Asahi should not be discounted as it has sufficient investment capacity to come in as a minority shareholder, which is preferred by ThaiBev&rsquo s management. In addition, it owns the second largest Japanese whisky company, Nikka, which has a global distribution network that ThaiBev could leverage on to grow its international premium spirits portfolio on a global scale,&rdquo the analysts point out.

 

Meanwhile, UOBKH analysts Llelleythan Tan and Heidi Mo point out ThaiBev&rsquo s possible divestments, as its stake in Frasers Property TQ5 0.00% has been earmarked as a non-core asset and may potentially be divested. However, they believe this is unlikely given Frasers Property&rsquo s share price being at an all-time low. 

 

&ldquo On the other hand, ThaiBev&rsquo s stake in Fraser and Neave (F& N) is considered a strategic investment given the operating synergies and collaborations with ThaiBev&rsquo s nonalcoholic beverages segment. However, management did mention that if the valuation was acceptable, the group would consider divesting its F& N stake,&rdquo they add.

 

In response to future growth drivers for the spirits segment, ThaiBev mentioned that the group has implemented a premiumisation strategy to attract a different customer profile and improve its international spirits portfolio. 

 

UOBKH analysts note that this was driven by the recent acquisitions of Larsen cognac and Cardrona Distillery in FY2023, which boast higher margins as compared with its domestic spirits stock-keeping unit (SKUs). Despite political tension in Myanmar, ThaiBev expects Grand Royal to continue its strong performance in FY2024.

 

Tan and Mo also expect ThaiBev&rsquo s beer subsidiary in Vietnam &mdash Sabeco &mdash to increase its average selling prices (ASPs) by 10%-15% in 2QFY2026 to pass on the higher excise taxes to customers. 

 

&ldquo In anticipation of the ASP hikes, we reckon that this would induce forward buying from customers, resulting in higher sales volumes in 4QFY2025/1QFY2026. However, beer sales volumes would likely normalise subsequently in 2QFY2026 as demand tapers off, although this may be mitigated by consumers down-trading to ThaiBev&rsquo s mass-market beer portfolio,&rdquo they note.

 

UOBKH has a lower target price on ThaiBev at 57 cents compared to 70 cents previously due to the re-rating of the company&rsquo s peer EV/ebitda multiples since its last update, while DBS keeps its target price at 69 cents.

 

Analysts at UOB Kay Hian (UOBKH) and DBS Group Research are keeping &ldquo buy&rdquo on Thai Beverage Y92 0.00%   (ThaiBev) following the company&rsquo s recently held Annual Information Meeting and analyst meeting.

 

In their June 23 report, DBS analysts highlight that the long-awaited BeerCo IPO remains part of ThaiBev&rsquo s strategic value unlocking agenda, as the company actively explores multiple options to maximise value for shareholders. One such option includes an equity partnering with a global brewer.

 

In terms of partnership, ThaiBev is looking out for strategic fit, valuation and culture fit, the analysts say. They note that the company is aiming for early to mid-2025, when market conditions are expected to improve on lower interest rates and US presidential election uncertainty is resolved.

 

As such, DBS believes that the BeerCo IPO is a key share price re-rating catalyst, adding that an equity partnership with a global brewer will be key to act as an anchor valuation. The frontrunner is likely to be Budweiser APAC, with its significant investment capacity. The analysts believe that Budweiser&rsquo s APAC&rsquo s global premium portfolio would complement ThaiBev&rsquo s existing mainstream focused portfolio. 

 

&ldquo Nonetheless, we believe Asahi should not be discounted as it has sufficient investment capacity to come in as a minority shareholder, which is preferred by ThaiBev&rsquo s management. In addition, it owns the second largest Japanese whisky company, Nikka, which has a global distribution network that ThaiBev could leverage on to grow its international premium spirits portfolio on a global scale,&rdquo the analysts point out.

 

Meanwhile, UOBKH analysts Llelleythan Tan and Heidi Mo point out ThaiBev&rsquo s possible divestments, as its stake in Frasers Property TQ5 0.00% has been earmarked as a non-core asset and may potentially be divested. However, they believe this is unlikely given Frasers Property&rsquo s share price being at an all-time low. 

 

&ldquo On the other hand, ThaiBev&rsquo s stake in Fraser and Neave (F& N) is considered a strategic investment given the operating synergies and collaborations with ThaiBev&rsquo s nonalcoholic beverages segment. However, management did mention that if the valuation was acceptable, the group would consider divesting its F& N stake,&rdquo they add.

 

In response to future growth drivers for the spirits segment, ThaiBev mentioned that the group has implemented a premiumisation strategy to attract a different customer profile and improve its international spirits portfolio. 

 

UOBKH analysts note that this was driven by the recent acquisitions of Larsen cognac and Cardrona Distillery in FY2023, which boast higher margins as compared with its domestic spirits stock-keeping unit (SKUs). Despite political tension in Myanmar, ThaiBev expects Grand Royal to continue its strong performance in FY2024.

 

Tan and Mo also expect ThaiBev&rsquo s beer subsidiary in Vietnam &mdash Sabeco &mdash to increase its average selling prices (ASPs) by 10%-15% in 2QFY2026 to pass on the higher excise taxes to customers. 

 

&ldquo In anticipation of the ASP hikes, we reckon that this would induce forward buying from customers, resulting in higher sales volumes in 4QFY2025/1QFY2026. However, beer sales volumes would likely normalise subsequently in 2QFY2026 as demand tapers off, although this may be mitigated by consumers down-trading to ThaiBev&rsquo s mass-market beer portfolio,&rdquo they note.

 

UOBKH has a lower target price on ThaiBev at 57 cents compared to 70 cents previously due to the re-rating of the company&rsquo s peer EV/ebitda multiples since its last update, while DBS keeps its target price at 69 cents.