SAB – Waiting for the recovery of beer consumption after a stagnant year 2023
- In Q1-2024, SAB's net revenue and NPAT-MI gained VND 7,184 bn (or USD 283 mn, -15.7% QoQ, +15.6% YoY), and VND 997 bn (or USD 39.3 mn, +5.3% QoQ, +3.1% YoY). It is driven by the different timing of Tet holiday amidst 2023 and 2024, supporting the larger portion of beer sales volume recorded in the first quarter of 2024 than that of 2023.
- In 2024, we expect SAB to show growth in both revenue and NPAT, driven by the recovery from a low base in 2023. However, we suppose that SAB's middle-term sales will set at one-digit growth by some negative factors like the prolonged strict enforcement of drunk driving laws, a fiercer competition, and a draft Law on Excise Tax related to alcohol beverages.
- SAB stock is trading at a trailing P/E of 18.2x - lower than SAB‘s 5Y-Average P/E (24.1x). It remains lag compared to the Asian peers (21.4x). In spite the growth outlook is not attractive due to our conservative outlook for beer sales volume, SAB’s valuation is cheap, combining with an attractive dividend yield, we suppose that SAB is the suitable stock for investors prefer investment strategy of stable dividends in the middle-term.
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