Here's why ThaiBev's turnaround may already be in the works

A rebound in beer consumption and retail sales bodes well for the second largest Thai beer player.

Thailand’s domestic beer consumption rose jumped 21% YoY in April, signalling what could be a demand recovery for Thai Beverage which has faced a slump in 2018.

Also read: Bottoms up: The worst is over for ThaiBev

The latest statistics from Thailand’s Office of Industrial Economics revealed that domestic beer consumption was up 21% YoY in April, a sharp turnaround from the slow demand growth in March.

RHB Research analyst Juliana Cai noted that the inclusion of Sabeco and exports could have distorted ThaiBev’s YoY numbers, but – on a seven-month basis (Oct 2018-Apr 2019) – the kingdom’s beer consumption has grown 9% YoY. “We believe ThaiBev will grow in tandem, given that it is the second-largest beer player in the market with a c.40% market share,” she said.

Beer consumption is not the only figure supporting the firm’s recovery. Thailand retail sales were up 12% YoY in the last two quarters. “Whilst farm income was stable, we believe the economic stimulus package – including state welfare cards to 14.5 million low-income earners and personal income tax deductions – should help boost domestic spending,” said Cai.

“Amidst market uncertainties revolving around US-China trade tensions, we favour ThaiBev over other Singapore-listed consumer companies, given the strength of the THB compared to regional currencies,” she concluded.

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