Is Thai Beverage worth S$0.87 a share?

Analysts are split on Thai Beverage, which recently reported a slight decrease in quarterly revenue.

  • Thai Beverage PCL (SGX: Y92) share price hits S$0.70 this week
  • The drinks manufacturer’s net profit for the second quarter of 2021 came in 1.2% higher
  • Maybank raised its price targets following the results, while CIMB revised it lower
  • Buy and sell ThaiBev stocks with an IG account

ThaiBev share price: What’s the update?

Thai Beverage shares are up 6% since it presented its second quarter and first half financial results last Friday (14 May 2021).

The beverage manufacturer’s shares are trading at S$0.70 as at 11:40 SGT on Tuesday.

The counter is down 4.1% year to date. Analyst sentiments published by SGX StockFacts show a consensus rating of ‘outperform’ and average target price of S$0.87 on the stock.

The price target represents an upside of 24.3% from the last traded price.

Read more: Top 5 Singapore stocks to watch in May 2021

Why are analysts split on the stock?

Maybank on Monday maintained a ‘buy’ recommendation on ThaiBev, while lifting its target price to S$0.99 from S$0.95 previously, pegged to a current price-to-earnings ratio of 20 times for FY2021.

The analysts noted that the group’s first half profit after tax and minority interests of 14.4 billion Thai baht is ahead of their estimates.

In response, the firm raised its earnings per share (EPS) forecast for FY2021 to FY2023 by 4%. This also reflected ‘the lower-than-expected effective tax rate of roughly 17% due to the absence of tax expenses relating to ThaiBev’s restructuring of its beer business’, Maybank wrote.

CIMB, on the other hand, lowered its price target to S$0.84 from S$0.87 previously, while reiterating an ‘add’ rating.

‘We opt to be conservative on ThaiBev’s near-term prospects as we think there is potential that revenue growth could slow down with tightening measures being implemented from April 21 onwards due to Covid-19,’ said analyst Cezzane See.

Lower revenues could also put pressure on CIMB’s forward margins. As such, See cut the firm’s FY2021 to FY2023 EPS by 2.7%, 3.2% and 3.1% respectively.

ThaiBev lifts H1 2021 dividends by 50%

Thai Beverage generated sales revenue amounting to 59.46 billion Thai baht in the second quarter of 2021, a decrease of 3.2% year-on-year. The group attributed the decline to the impact of a new wave of Covid-19 cases in Thailand in the first three months of the year.

Net profit, however, came in 1.2% higher for the quarter at 6.54 billion baht, against the 5.58 billion baht recorded in the same period a year prior.

Across the first half of 2021 (H1 2021), revenue was 131.252 billion baht, a decrease of 4.3% year-on-year.

Net profit rose 8.7% year-on-year to Baht 16.08 million baht in H1 2021.

ThaiBev’s board of directors has declared an interim dividend per share (DPS) amount of 0.15 baht for the period October 2020 to March 2021, to be paid out on 11 June 2021.

The DPS for H1 2021 represents a 50% increase from H1 2020’s payout.

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