DBS is raising its FY17F and FY18F forecasts by 9% and 32% respectively, taking into consideration the treatment of its increased stake in Vinamilk
“Our higher TP of $2.57 (from $2.37) reflects the higher stake and market value in Vinamilk, coupled with a higher market price for F&N Berhad, the group’s Malaysia-listed subsidiary,” says analyst Andy Sim in a Thursday report.
Sim continues to believe F&N will be the vehicle for ThaiBev’s expansion outside of Thailand and for non-spirits businesses. But contrary to market expectations, Sim does expect an outright share swap between ThaiBev and TCC Assets for F&N shares.
“Instead, we believe ThaiBev will only increase its stake in F&N when opportune, such as when F&N undertakes an equity fund-raising exercise, as and when it requires additional capital for expansion,” says Sim.
Shares in F&N are trading at $2.34.
