Thai Beverage (ThaiBev), a household name in the drinks industry, is raising a toast to potential growth and strategic shifts that could refresh investor interest. While the company’s stock price has nearly doubled from its initial public offering (IPO) price of 28 cents in 2006, long-term investors have endured a bumpy ride, particularly with the stock down 3.57% to 54 cents as of January 17, 2025. However, recent developments suggest the F&B giant could be on the verge of unlocking significant value.
Steady Performance Despite Market Woes
The resilient beverage industry has supported ThaiBev through turbulent times. Its FY2024 earnings reached THB27.2 billion ($1.05 billion), a slight 0.8% year-on-year decline, while total revenue grew 2.2% to THB340.29 billion, driven by robust performances in its spirits and food segments. Notably, the second half of FY2024 saw improvements fueled by recovering tourism, government economic initiatives, and major sporting events.
The company’s full-year dividend also saw a modest increase of 3.3% to THB0.62 per share, providing a steady stream of returns for its shareholders.
Strategic Shifts and Opportunities
ThaiBev is positioning itself as a “pure play” regional food and beverage leader by reshuffling its holdings. Following a shareholding rejig by the controlling Sirivadhanabhakdi family, ThaiBev increased its stake in Fraser & Neave (F&N) from 28.31% to 69.61% while divesting its nearly 29% stake in Frasers Property to TCC Assets. This strategic focus aligns ThaiBev more closely with F&N’s non-alcoholic beverage segment, reducing exposure to the volatile earnings associated with property assets.
Paul Chew, head of research at PhillipCapital, highlights this move as a reduction of risk and an opportunity to streamline ThaiBev’s business model. Additionally, DBS Group Research maintains a “buy” call on ThaiBev, setting a target price of 77 cents and projecting a 13% year-on-year earnings growth for FY2025.
Spinoffs Could Unlock Value
Two potential spinoffs are creating a buzz in the investment community. Analysts at DBS suggest that ThaiBev could list a newly created F&B entity (“F&B Co”), which could be worth over $3.4 billion or approximately 15 cents per share. This move would allow the company to deleverage, improve its strategic focus, and unlock shareholder value.
Equally compelling is the long-awaited IPO of BeerCo, initially proposed in 2021 but delayed multiple times. With market conditions improving and interest rates stabilizing, BeerCo’s IPO could finally happen in the third quarter of 2025, according to Michael Chye, head of ThaiBev’s beer product group. If executed, this spinoff could be a game-changer for ThaiBev, injecting fresh capital and revitalizing investor enthusiasm.
Market Dynamics and Challenges
Thailand’s recent decision to permit small-scale liquor production has raised concerns about market competition. However, DBS analysts believe the impact on ThaiBev will be limited due to the company’s dominant position as the second-largest market player. Restrictions on alcohol advertising may also hamper smaller competitors’ ability to gain traction.
Looking Ahead
With a combination of strategic realignments, anticipated spinoffs, and a focus on core operations, ThaiBev appears poised for a resurgence. As the beverage giant continues to refine its operations and seize market opportunities, investors may finally have reasons to celebrate.
In 2025, ThaiBev might not just quench thirsts—it could also satiate the hunger for solid returns.
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