Company Name: THAI BEVERAGE PUBLIC CO LTD
| Research House: CIMB | Price Call: BUY | Target Price: 0.60 |
“ThaiBev is poised to be an emerging force in Southeast Asia's beverage industry. We see multiple earnings catalysts, beginning with its fast-growing non-alcoholic beverage business, 29% stake in F&N, and the turnaround of its beer business.” It adds, the spirits business is a “cash cow,” providing stable core earnings as its market-leader position in Thailand is protected by advertising restrictions, allowing it operating margins of over 20%.
It notes the non-alcoholic drinks division contributed 11% of 1H12 earnings, up from 4% in FY10 as the new business has an extensive domestic and regional distribution network. "At current share price, investors will only be paying for its spirits business, we reckon. They will be getting non-alcoholic beverages, beer and its 29% stake in F&N for free. In addition, management has been paying out 70%-80% of ThaiBev's earnings in the past five years."
It expects yields around 5.6%. ThaiBev is flat at $0.34 after a series of large trades.
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