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. 

CapitaLand Limited Is Trading Close To Its 52-Week Low Price: Is It Cheap?

CapitaLand Limited (SGX: C31) is a real estate development company focused on investment holding. The Company and its subsidiaries are principally engaged in investment holding, real estate development, investment in real estate financial products and real estate assets, investment advisory and management services, as well as the management of serviced residences.

CapitaLand Limited is one of the largest undervalued stock company in the Singapore stock market with market cap 13.113 B Its diversified global real estate portfolio includes integrated developments, shopping malls, serviced residences, offices, and homes.

CapitaLand’s shares are just 7 cents higher than the 52-week low price of S$2.98 at the current price of S$3.05. This recent move in the stock raises a important question: Is CapitaLand cheap now? This question is really worth according to the investor's point of view because if the firm’s shares are cheap, it might be a good opportunity for investors.

The answer is not easy. But, Multi Management Future Solutions figure some insight by comparing CapitaLand’s current valuations with that of the market by focusing on are the price-to-book (PB) ratio, price-to-earnings (PE) ratio, and dividend yield.

Here we are using the SPDR STI ETF (SGX: ES3) as a proxy for the market; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market benchmark, the Straits Times Index.

The PB ratio of CapitaLand is 0.7, which is lower than the SPDR STI ETF’s PB ratio of 1.1. In addition, its PE ratio is lower than that of the SPDR STI ETF’s (9.2 vs 10.7). 

Similarly, the property outfit’s dividend yield of CapitaLand is 3.9% is higher than the market’s yield of 3.6%. The higher a stock’s yield is, the lower is its valuation.

Hence, due to the market average due to its low PB ratio, low PE ratio, and high dividend yield, we can argue that CapitaLand is priced at a discount to the market average.