SGX-listed Thai Beverage Public Company Limited, or ThaiBev (SG:Y92), yesterday announced an investment plan worth ฿7 billion to expand its business operations. The company disclosed that it will invest ฿4 billion in the construction of a new beverage factory in Cambodia, while an additional ฿3 billion will be directed towards logistics facilities, a biogas factory, and other projects.
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The ThaiBev share price traded down by 1.82% on Thursday. Year-to-date, the stock has experienced a loss of around 20% in trading, driven by weak demand and rising costs hurting its profits.
Thai Beverage is a leading beverage company in Thailand and commands a significant presence in the Southeast Asia region. The company provides a wide range of both alcoholic and non-alcoholic beverages, along with certain food items.
The Road Ahead
The company’s expansion plans include diversification of market presence, expansion of the product portfolio, and addressing the evolving demands of consumers. The company emphasized that it is implementing measures to fortify its brand and enhance its competitive standing, considering the resurgence of tourism and the food and beverage industries.
Under this plan, it is constructing its first beer production plant in Cambodia, with an anticipated completion within two years. This new facility boasts a production capacity of 50 million hectoliters annually. With the establishment of the new brewery, the company aims to capture a 10% market share in the long term for its brand, Chang Beer, within the premium beer segment.
Additionally, the company revealed that it plans to invest between ฿800 million and ฿1 billion for the expansion of its food business in the current Fiscal Year (FY23), with a specific emphasis on KFC and Oishi. The goal is to open 50 to 60 new restaurants within the same period.
What is the Forecast for Thai Beverage?
Despite certain weaknesses in the company’s Q3 2023 results, analysts remain optimistic about the expected rebound in consumption for FY 2024, combined with decreasing costs. Analysts believe that the company’s strong market presence in Thailand, the prospect of recovery in Vietnam, and its attractive valuation together present a convincing case for investment.
According to TipRanks consensus, Y92 stock received a Strong Buy rating backed by all Buy recommendations from four analysts. The ThaiBev share price forecast stands at S$0.84, which shows a favorable change of 52.14% in the shares.
