Strategic Pricing and Attractive Valuation Drive Buy Rating for Thai Beverage Public Co Amid Deferred Tax Hike

Analyst Lim Siew Khee from CGS-CIMB reiterated a Buy rating on Thai Beverage Public Co (TBVPF – Research Report) and keeping the price target at S$0.56.

Lim Siew Khee has given his Buy rating due to a combination of factors including the deferred excise tax hike in Vietnam, which provides Thai Beverage Public Co with a more favorable environment to manage pricing strategies. The phased implementation of the tax increase allows the company’s subsidiary, SABECO, to gradually pass on the tax burden to consumers, potentially leading to manageable annual price increases. This strategic pricing flexibility is expected to help the company capture market trends and maintain competitiveness.
Additionally, the current valuation of Thai Beverage Public Co is seen as attractive, with its forward P/E ratio being the lowest in five years. This suggests that the market has already priced in many of the economic challenges, offering potential upside. Lim Siew Khee also notes potential catalysts for re-rating, such as improved margins from cost control measures and increased sales volumes from downtrading in Vietnam, while acknowledging risks like prolonged economic weakness and increased SG&A costs.