PhillipCapital analyst Paul Chew has downgraded his call on Thai Beverage (ThaiBev) Y92 to “accumulate” after seeing a “slow start” to the FY2023.
In his report, Chew deemed ThaiBev’s revenue and ebitda for the 1QFY2023 as below his expectations. While the food and beverage (F&B) group’s revenue and ebitda stood at 27% and 25% of Chew’s full-year forecasts respectively, the analyst notes that the first quarter is usually one that is “seasonally stronger”.
“1QFY2023 faced tough comparables due to the heavy front-loading of volumes a year ago. Even excluding the base effect, volumes declined 8% against 1QFY2021. We worry higher prices may have negatively impacted volumes. Margins are also weaker from higher marketing spend to boost brand-building after cut-backs during the pandemic,” says Chew.
Despite the downgrade, Chew has kept his earnings for the FY2023 unchanged as he expects the group to see a recovery in its earnings with the re-opening of Thailand’s borders. The event-driven spending from the election and improvement in economic conditions will also help to boost the group’s earnings, he says.
Chew’s target price is kept at 80 cents at 13x of ThaiBev’s FY2023 core earnings, its five-year average, as well as its associate market cap.
As at 12.24pm, shares in ThaiBev are trading 0.5 cent lower or 0.76% down at 65.5 cents.
