Given the “slightly disappointing” revenue and ebitda, Yeo has lowered his earnings estimates for the FY2025, FY2026 and FY2027 by 1%, 2% and 4% to 338.28 billion baht, 337.89 billion baht and 338.13 billion baht respectively. The lower estimates account for weaker beer volume sales from Vietnam and a slight decline in spirits volume sales.
Yeo has not made any changes to his margin assumptions as ebitda margin is largely in line with his estimates.
In line with his earnings adjustment, Yeo’s value of ThaiBev’s core business, excluding Sabeco, is lowered by 3% to 57 cents from 59 cents.
“Our value of Sabeco based on market value was reduced to 6 cents from 8 cents previously, due to Sabeco’s share price decline on the Ho Chi Minh stock exchange,” Yeo writes in his Sept 1 report. “Our intrinsic value of ThaiBev before applying our environmental, social and governance (ESG) premium is hence reduced from 67 cents to 63 cents, resulting in a 6% reduction in our target price.”
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That said, Yeo remains positive on the group as he expects its long-term growth momentum to continue, driven by the penetration of sales points and stronger tourism-led consumption over the next few years. Furthermore, ThaiBev has strong market leadership in Thailand and Vietnam and the group’s beer business in both countries is undergoing a recovery with an expected pick up in demand.
As at 3.31pm, shares in ThaiBev are trading 0.5 cents higher or 1.08% up at 47 cents.
