3 Things Investors Should Know Before Investors in Thai Beverage Public Company Limited

With a market capitalization of more than S$17 billion, Thai Beverage Public Company Limited (SGX: Y92) is one of the most valuable beverage companies in Asia. Thai Beverage Public Company Limited is Singapore undervalued stock produces a wide range of branded beer and spirits in Thailand. But that has not stopped its shares from stumbling more than 30% year-to-date. Investors who are bargain hunting might view this as an attractive entry point.

Here Multi Management Future Solutions presenting the three things to know about the company.

Revenue Generation
Thai Beverage owns several significant alcoholic and non-alcoholic brands in Thailand. Through is signature beer, Chang, it has grown to become the largest beer player in South East Asia. It also sells non-alcoholic beverages such as OISHI Green Tea and est Cola. In 2012, it acquired Fraser and Neave Limited (SGX: F99), which has enabled it to expand overseas and increase its product offering. It now owns brands that Singaporeans are familiar with, such as F&N Magnolia, and F&N Seasons. 

2017 Total Sales Revenue Breakdown

Historical Track Record

Thai Beverage has had a remarkable track record of growth over the past few years. The group has benefitted from the rising wealth of people in the region. It also benefited from the timely acquisition of Fraser and Neave, which has facilitated business expansion outside of Thailand.

Its Revenue has increased by 4% per year over the time frame while operating income and earnings per share have increased by 4.9% and 12.5% respectively. There has been a clear and consistent increase in earnings per share each year, barring 2016, when the group changed its fiscal year end from December 31 to September 30.

Valuation
As of now, Thai Beverage’s share price is S$0.64, which gives the company a price-to-earnings (PE) multiple of 18.4 and a price-to-book (PB) ratio of 3.2. The valuation numbers are both above the Straits Times Index‘s (SGX:^STI) PE and PB ratios of 14.5 and 2.2, respectively, but are at a slight discount to the company’s own five-year-averages of 20.9 and 4.3.