Hold Rating for Thai Beverage Due to Vietnam’s Tax Hike and Market Challenges

In a report released yesterday, Llelleythan Tan from UOB Kay Hian maintained a Hold rating on Thai Beverage Public Co (TBVPF – Research Report), with a price target of S$0.45.

Llelleythan Tan’s rating is based on several factors impacting Thai Beverage Public Co. One of the main reasons is the recent announcement by Vietnam to increase its special consumption tax on beer and other alcoholic beverages to 90% by 2031. This tax hike is expected to negatively affect the beer sector, which is already facing challenges due to low volumes and changing consumer preferences.
To maintain its profit margins, Thai Beverage is likely to pass on the higher excise taxes to consumers, which could lead to increased beer prices and potentially lower consumption volumes. Despite a potential short-term boost in sales as customers stock up before the tax increase, the long-term outlook remains uncertain. These factors contribute to the Hold rating, as the company navigates through these market challenges while trying to protect its revenue and profitability.