ThaiBev BeerCo Pre-IPO - Declining rev and mkt share concerns but good cost control
Thai Beverage (THBEV SP) announced that it received a no-objection letter for the proposed spinoff of BeerCo from SGX-ST on 5th February, 2021.BeerCo’s performance was a mixed bag. Revenue declined due to COVID is well established but Vietnam’s business suffered a bigger setback owing to regulations which have a potentially longer negative impact.
The acquisition of SABECO was accretive to margins and ThaiBev has shown that it can turn things around via better cost controls as evidenced by the expanding profit margins amidst declining revenue.
While BeerCo commands dominant market share in their respective markets, Vietnam seems to be bleeding market share for the past few years.
In this note, we will look at the updated financials of BeerCo, operating data, and share our thoughts on how the unit has been performing.
We have previously shared early thoughts on the spin-off in:
ThaiBev Beer Brewery Pre-IPO Spin-Off - Early Take - Aiming to build an ASEAN champion
ThaiBev Beer Brewery Pre-IPO Spin-Off - Valuation Estimation and Implications
Thai Beverage Public Company is engaged in the production and distribution of alcoholic and non-alcoholic beverages, as well as the operation of Japanese restaurants. Co.'s business consists of four segments: spirits, beer, non-alcohol beverages and food. The spirits segment is engaged in the production and sales of branded spirits products. The beer segment is engaged in the production and sales of branded beer products. The non-alcoholic beverages segment involves the production and sales of branded water, soda, ready-to-drink coffee, energy drink, green tea and fruit juice flavour. The food segment includes Japanese restaurants, bakery shops and distribution of food and beverage.
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Hong Kong,
China ADRs,
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ASEAN.
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