Compiled by Navin Sregantan
THAI BEVERAGE (THAIBEV)
| HOLD (DOWNGRADED)
MAY 13 CLOSE: $0.765
FAIR VALUE: $0.88
OCBC Investment Research, May 13
ThaiBev's results were within expectations.
Q2 net profit declined 12 per cent year on year to 5.8 billion baht ($249.9 million), which translates to 24 per cent of our initial full-year forecast.
For the half year, net profit core improved 11 per cent year on year to 13.2 billion baht (S$572 million) or 55 per cent of our initial full-year forecast.
The decline in bottomline was mainly driven by poorer results from the spirits segment on domestic consumption softness.
We note that several cost saving/efficiency initiatives at Sabeco are underway - these include office rationalisation, lightweighting carton boxes, and negotiating better bulk purchasing rates for raw materials.
While these positive synergies from the Sabeco acquisition will flow through to its bottomline, we note that this will take time to bear fruit.
Looking ahead, aside from the coronation-related celebrations in May, we expect more muted performance from the domestic spirits segment.
After adjustments, our fair value drops 4 per cent from 91 cents to 88 cents.
ThaiBev has posted total returns of 37.2 per cent this year, against the Straits Times Index's 8.6 per cent, as at May 10.
| BUY (MAINTAINED)
MAY 13 CLOSE: $0.76
TARGET PRICE: $0.94
RHB Research Institute, May 13
Q4 topline dropped 2.8 per cent year on year while net profit rose by 16.9 per cent to $20.2 million, mainly due to a one-off investment gain of $4.7 million.
Without these one-offs, net profit would have declined year on year, mainly due to the weakness of its Singapore and Taiwan units.
Management is in negotiations over a potential merger and acquisition deal, likely to be in Vietnam.
Through a 7.85 per cent stake, HRnetgroup has become a strategic shareholder of Bamboos Health Care Holdings, with the aim of further expanding and developing its recruitment business in the healthcare sector.
We believe it is possible it could grow its stake further, as long as the deal is yield-accretive and strengthens its partnership even more.
Due to the ongoing trade war issues, management said some companies are holding off on hiring while waiting for the trade talks to settle.
It has noticed weaker numbers from its Singapore operations this quarter.
We expect the Singapore unit to remain weak in subsequent quarters.
Disclaimer: All analyses, recommendations and other information herein are published for general information. Readers should not rely solely on the information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.
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