What’s next for Thai Beverage shares?

• Thai Beverage PCL (SGX: Y92) share price opened at S$0.65 on Tuesday (2 August 2022)
• The drinks manufacturer has stated that it ‘remains committed’ to BeerCo Limited’s proposed listing
• The stock’s average price target has dropped to S$0.815
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ThaiBev stock price: what’s the update?

Thai Beverage (ThaiBev) shares continue to trade along a two-month low price this week.

The blue-chip counter saw over 22 million shares exchange hands on Monday (1 August 2022).

The listing is also down by approximately 3% on a year-to-date basis.

In terms of outlook, the Straits Times Index constituent has an average rating of ‘outperform’ and average target price of S$0.815 (down from S$0.87 on 8 June 2022), according to the latest SGX StockFacts data.

The target price equates to a 29% upside potential from ThaiBev’s last traded price.

UOB’s equity research team rated ThaiBev a ‘buy’ alongside a lower target price of S$0.94 a share (from S$1.05).

‘Higher consumption volumes driven by international tourism and domestic consumption are expected to boost earnings moving forward, although record-high inflation and higher raw material costs may dampen the recovery,’ the analysts wrote in a 16 June 2022 investor note.

OCBC analysts kept a ‘buy’ call and price target of S$0.88, stating that the company will be a ‘beneficiary’ of borders reopening and the gradual return of tourists.

Meanwhile, RHB analysts previously reiterated a ‘buy’ rating but raised target price to S$0.97 (from S$0.82). They liked the stock ‘as a proxy to capture the consumption recovery’, and also lifted their FY2022-2024 earnings forecast by 5% to 6%.

ThaiBev still ‘committed’ to proposed BeerCo listing

On 29 July, ThaiBev issued a clarification on recent news published by international leading press claiming that the proposed spin-off listing of BeerCo Limited has been ‘pushed back… to September-October subject to an improvement in market conditions’.

The drinks manufacturer clarified that it ‘remains committed to pursuing the proposed spin-off listing’.

It added that ‘the form, feasibility, and appropriate timing of listing is evaluated on an ongoing basis, taking into consideration all relevant factors including prevailing market conditions, and no final decision has been made as to the timing for the listing’.

‘The board of directors of ThaiBev may, notwithstanding that all requisite regulatory approvals have been obtained or will be obtained in due course, decide not to proceed with the proposed spin-off listing if…the board deems it not in the interests of the shareholders of ThaiBev to proceed with the same,’ the company stated.

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