CGS International
June 23, 2025
Thai Beverage: Unlocking Growth Across ASEAN and Navigating Market Headwinds
Executive Summary: Tapping Multiple Levers for Sustainable Growth
Thai Beverage Public Company Limited (THBEV), a leading distillers and vintners player in Singapore, continues to leverage multiple growth drivers while awaiting favorable market conditions for its much-anticipated BeerCo IPO. With a strategic focus on market positioning, margin preservation, and regional expansion, THBEV demonstrates robust resilience amidst economic uncertainties and evolving industry dynamics. This report dissects THBEV’s latest performance, regional strategies, peer comparisons, and sustainability initiatives, providing a comprehensive outlook for investors.
THBEV’s Strategic Priorities: Strengthening Position and Preserving Margins
- BeerCo IPO: THBEV maintains interest from strategic investors in BeerCo but will delay the IPO until market conditions improve.
- Vietnam Price Adjustment: Subsidiary SABECO to raise prices by 2% ahead of an excise tax hike, aligning with expected industry trends.
- Cost Management: Secured raw materials for spirits at favorable prices; margin improvements expected from FY26 as legacy higher-cost inventory is cycled out.
- Market Focus: Prioritizing core market leadership, distribution network expansion, and margin defense in the interim.
Beer Segment: Dominance in Thailand, Rapid Growth in Myanmar
THBEV’s beer division remains a cornerstone of its growth strategy, with a dual approach of defending its leadership in Thailand and accelerating regional expansion, particularly in Myanmar and Vietnam.
- Thailand: Industry sales slowed to +2% yoy in April 2025, down from +5% in 1Q25, impacted by an 8% decline in tourist arrivals. Despite this, THBEV’s Chang brand reinforced its #1 position through entertainment event-led campaigns and an enhanced off-trade presence.
- Vietnam: SABECO’s Saigon brand, priced 20–30% below peers, is well-positioned to benefit from downtrading amid soft consumer sentiment. The planned 2% price hike anticipates excise tax changes.
- Myanmar: A key growth engine, with beer revenues up 46% yoy in FY24 and 98% yoy in 1HFY25. Market share has surged from 1% in 2020 to 16% in 2024 as per Euromonitor, driven by the Chang and Tapper brands and local production at Emerald Brewery.
Myanmar’s beer market is among the fastest-growing in ASEAN since 2023, with THBEV’s facility unaffected by the March 2025 earthquake. The company affirmed Myanmar as a strategic focus.
Spirits Segment: Margin Management Amid Domestic Headwinds
- Thailand: Industry spirits sales fell 26% yoy in April 2025, grappling with weak farmer incomes (-5% yoy), political instability, and concerns over a looming 36% US tariff. THBEV is holding list prices steady but may see near-term margin compression due to promotional activity and distribution enhancements for premium brands.
- Cost Advantage: Lower molasses procurement prices will benefit margins from FY26 as old inventory is depleted.
Financial Performance and Forecasts
| Year End Sep |
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Revenue (THBm) |
332,931 |
340,289 |
350,970 |
365,663 |
377,725 |
| Operating EBITDA (THBm) |
58,969 |
61,650 |
61,288 |
65,817 |
67,514 |
| Net Profit (THBm) |
27,434 |
27,216 |
26,476 |
29,875 |
30,920 |
| Core EPS (THB) |
1.09 |
1.08 |
1.05 |
1.19 |
1.23 |
| Core EPS Growth (%) |
(8.9) |
(0.8) |
(2.7) |
12.8 |
3.5 |
| Dividend Per Share (THB) |
0.60 |
0.62 |
0.65 |
0.65 |
0.65 |
| Dividend Yield (%) |
5.28 |
5.45 |
5.72 |
5.72 |
5.72 |
| ROE (%) |
13.5 |
15.5 |
17.2 |
18.0 |
17.2 |
Peer Comparison: Global Spirits, Beer, and Non-Alcoholic Beverage Majors
THBEV stands out among regional and global beverage peers, balancing robust yields with steady growth and a disciplined capital structure. Below is a comparative snapshot of major players across spirits, beer, and non-alcoholic beverages:
| Company |
Ticker |
Market Cap (US\$ m) |
PE 25F |
PE 26F |
P/BV 25F |
P/BV 26F |
ROE 25F |
ROE 26F |
EV/EBITDA 25F |
EV/EBITDA 26F |
Div Yield 25F |
Div Yield 26F |
| Thai Beverage |
THBEV SP |
8,703 |
10.4 |
9.5 |
1.75 |
1.62 |
17.6% |
17.8% |
7.3 |
6.7 |
5.7% |
5.7% |
| Jiangsu King’s Luck Brewery |
603369 CH |
6,843 |
13.5 |
12.1 |
2.8 |
2.5 |
22.1% |
21.5% |
8.9 |
7.5 |
3.2% |
3.6% |
| Jiangsu Yanghe Brewery |
002304 CH |
13,840 |
17.7 |
17.0 |
2.0 |
2.0 |
11.0% |
11.8% |
9.3 |
9.2 |
7.0% |
7.0% |
| Kweichow Moutai |
600519 CH |
250,081 |
18.9 |
17.3 |
6.8 |
6.1 |
38.3% |
37.2% |
12.7 |
11.4 |
4.0% |
4.3% |
| Luzhou Laojiao |
000568 CH |
23,403 |
12.1 |
11.3 |
3.3 |
3.0 |
28.0% |
27.7% |
7.3 |
6.6 |
5.7% |
6.6% |
| Wuliangye Yibin |
000858 CH |
64,668 |
13.4 |
12.4 |
3.1 |
2.9 |
23.9% |
24.1% |
7.0 |
6.2 |
5.2% |
5.6% |
| Brown-Forman Corp |
BF/B US |
12,252 |
14.0 |
15.0 |
2.9 |
2.6 |
20.2% |
18.5% |
12.5 |
12.0 |
3.6% |
3.8% |
| Davide Campari-Milano NV |
CPR IM |
8,153 |
19.5 |
17.2 |
1.7 |
1.6 |
9.0% |
9.6% |
12.5 |
11.6 |
1.2% |
1.2% |
| Diageo PLC |
DGE LN |
56,387 |
15.4 |
14.5 |
4.7 |
4.1 |
33.3% |
31.2% |
12.9 |
11.7 |
4.0% |
4.2% |
| Pernod Ricard SA |
RI FP |
25,452 |
13.0 |
12.8 |
1.3 |
1.3 |
10.7% |
10.3% |
10.9 |
10.8 |
6.2% |
6.1% |
| Remy Cointreau SA |
RCO FP |
2,722 |
19.2 |
18.0 |
1.2 |
1.2 |
5.7% |
5.9% |
11.5 |
11.6 |
3.2% |
3.2% |
| Simple Average (Spirits) |
|
|
15.8 |
14.8 |
3.2 |
2.9 |
21.6% |
21.0% |
10.7 |
9.9 |
4.3% |
4.5% |
Industry Trends: ASEAN Beer and Spirits Market Dynamics
– Thailand’s monthly domestic white liquor and mixed liquor volumes have seen a downward trend since 2021, with significant weakness in 2025.
– Monthly beer sales volumes in Thailand and Vietnam reflect resilience, with Myanmar outpacing regional peers as one of ASEAN’s fastest-growing beer markets since 2023.
Balance Sheet and Key Ratios Snapshot
|
Sep-23A |
Sep-24A |
Sep-25F |
Sep-26F |
Sep-27F |
| Total Cash and Equivalents (THBm) |
57,310 |
54,123 |
51,256 |
49,628 |
54,635 |
| Total Liabilities (THBm) |
299,358 |
298,538 |
294,166 |
290,026 |
285,785 |
| Shareholders’ Equity (THBm) |
201,099 |
149,208 |
159,351 |
172,894 |
187,482 |
| Net Gearing (%) |
56.0 |
78.6 |
73.6 |
67.8 |
59.9 |
| ROIC (%) |
13.2 |
11.2 |
11.3 |
12.3 |
12.7 |
| ROCE (%) |
10.3 |
10.7 |
11.2 |
11.9 |
11.9 |
| Operating EBITDA Margin (%) |
17.7 |
18.1 |
17.5 |
18.0 |
17.9 |
Key Growth Drivers and Segment Volumes
- Spirit Volume (m litres): 642.8 in FY23, projected to reach 653.8 by FY27.
- Beer Volume (m litres): 2,240.4 in FY23, expected to climb to 2,584.8 by FY27.
- Non-Alcoholic Beverage Volume (m litres): 3,073.0 in FY23, projected to grow to 3,650.1 by FY27.
ESG: Driving Sustainability and Efficiency
- THBEV achieved a 5.33% reduction in water intensity and a 5.12% decrease in Scope 1 and 2 GHG emissions in FY24, based on FY23 levels.
- 97% of glass packaging in Thailand was reused or recycled in FY24, with a target for 100% by FY25 (FY30 for PET bottles and aluminium cans).
- Ambitious targets: 7% reduction in water intensity and 42% reduction in Scope 1 and 2 GHG emissions by FY30, with at least 50% renewable energy use.
- In 2023, THBEV was selected for the DSJI Emerging Markets and DJSI World Indices for the eighth and seventh consecutive years, respectively, and scored 100/100 in six out of 27 S&P Global ESG criteria.
Investment Case and Analyst Outlook
- Recommendation: Add (no change)
- Target Price: S\$0.56
- Current Price: S\$0.445
- Expected Upside: 25.8%
- Dividend Yield: 5.7%
- Key Catalysts: Margin recovery from cost controls, volume uplift from downtrading in Vietnam, continued growth in Myanmar.
- Risks: Prolonged macroeconomic softness, higher SG&A impacting margins.
Conclusion: Resilience, Expansion, and Sustainable Value Creation
Thai Beverage stands out in the regional beverage sector, underpinned by its strong market positions in Thailand, Vietnam, and Myanmar, disciplined cost management, and robust ESG initiatives. While near-term challenges persist, particularly in the spirits segment and broader macroeconomic environment, THBEV’s diversified regional exposure, steady dividend yields, and ongoing efficiency initiatives provide confidence in its long-term growth trajectory and value proposition for investors.
