+ Resilient spirits. Volumes rebounded 18.5% YoY to 161mn litres. The comparable period last year was weaker due to a 1-month alcohol ban in Thailand. QoQ, volumes declined 2.2%. Volume resilience can be explained by typical off-premise consumption for spirits, workers returning to villages from cities and white spirits’ better affordability than other alcohols. Margins expanded from lower selling expenses.
– Sluggish food sales. While food earnings rebounded sharply from a year ago, food’s THB163mn EBITDA was substantially below its pre-pandemic quarterly run rate of THB470mn. Dine-in restrictions curbed revenue growth and kept the division in net losses.
The ongoing closure of entertainment venues and restaurants in Thailand will continue to affect beer and food outlets, in our view. Beer is mainly consumed on-premises, unlike spirits. The upside surprise is ThaiBev’s ability to control costs aggressively to adapt to the current environment.
Maintain BUY with unchanged TP of S$0.86
Our target price stays at S$0.86, based on 18x FY21e earnings, its 5-year average.