Thai Beverage PLC Y92

Thai Beverage as the name suggests, they produce and distributes alcoholic and non-alcoholic beverages, and food products in Thailand and internationally. Thai Beverage reported its full-year results for the financial year ended 30 September 2018.

Acquisitions

  • 76% shareholding interest in Spice of Asia Co.,Ltd. (SOA) on 3 October 2017 to operate 10 stores of restaurants serving hotpot
    and Thai food
  • 75% shareholding interest in Myanmar Supply Chain and Marketing Services Co.,Ltd. and Myanmar Distillery Co.,Ltd. (MSC &
    MDC), which incorporated in the Republic of the Union of Myanmar, on 12 October 2017 to operate spirits business in
    Myanmar
  • 252 existing KFC stores in Thailand by The QSR of Asia Co.,Ltd. (QSA), a wholly-owned subsidiary of the Company on
    1 December 2017
  • a 53.59% shareholding interest in Saigon Beer – Alcohol – Beverage Joint Stock Corporation (Sabeco), a company incorporated
    in The Socialist Republic of Vietnam and currently listed in Ho Chi Minh Stock Exchange (HOSE), on 29 December 2017 to
    operate mainly in the beer business.
  • 75% shareholding interest in Havi Logistic Co.,Ltd. (Havi), which operates logistic businesses for food services in Thailand, by
    Thai Beverage Logistics Co.,Ltd., a wholly owned subsidiary of the Company on 28 February 2018.

Excise tax

Thailand Government have also imposed Elderly Fund tax of 2% for all alcoholic beverages and tobacco products, both imported and domestically
produced with effective from 26 January 2018.

Beer

  • Prior: 155 Baht per litre of pure alcohol content and 48% of the last wholesale price exclude VAT.
  • New: 430 Baht per litre of pure alcohol content and 22% of the suggested retail price exclude VAT

White spirits

  • Prior: 145 Baht per litre of pure alcohol content and 4% of the last wholesale price exclude VAT
  • New: 155 Baht per litre of pure alcohol content and 2% of the suggested retail price exclude VAT.

Other distilled liquor

  • Prior: 250 Baht per litre of pure alcohol content and 25% of the last wholesale price exclude VAT.
  • New: 255 Baht per litre of pure alcohol content and 20% of the suggested retail price exclude VAT.

Another interesting tax is Sugar tax which will increase every two years onwards until 1 October 2023.

Financial Highlights

Revenue from sales (million Baht) 229,695 an increase of 20.9% but Net profit drop to (million Baht) 20,726 a decrease of 40.2%.

Attributable Profit also drop to (million Baht) 18,530 a decrease of 46.3%

Dividend

Payout ratio increase 4% to 53%, however, Net profit is lower for this FY18.

The payout per share is THB 0.39 (FY18) to THB 0.67 (FY17)

Financial Ratios

All the ratios showed that the company has been borrowing to funds their acquisitions.

It might be a good debt as they are aggressively doing the acquisition to gain bigger and strong market shares.

Summary

Do I have confidence in this company? The answer YES!

With the strong market shares in Thailand and Myanmar after all the acquisitions, I’m sure we can see good results for FY19.

Another business I like about ThaiBev is their KFC stores.

Author: The Financial Guy

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