How ThaiBev can benefit from the brewing beer sales growth

In Thailand, beer sales registered a 10% growth in May.

RHB noted that Thailand's volume of beer sales has registered positive YoY growth of 5% and 10% in April and May, a stark turnaround from the 17% decline year-on-year in October last year after the passing of the late King.

According to RHB, this could mean that beer consumption has already normalised in the country.

"We expect 2H17 to continue to see positive growth in beer volumes. According to management, Thai Beverage (ThaiBev) has maintained its 40% market share in the beer segment as at April 2017. As such, we expect ThaiBev’s beer segment to perform in line with the market," the brokerage firm noted.

It added, "We expect 2H17 to continue to see positive growth in beer volumes. According to management, Thai Beverage (ThaiBev) has maintained its 40% market share in the beer segment as at April 2017. As such, we expect ThaiBev’s beer segment to perform in line with the market."

On the other hand, whilst there is no market data released on spirits, RHB reckoned that the recovery in beer consumption can also be seen as a proxy for the consumption of spirits.

"We anticipate the decline in spirit volumes to dissipate in 2H17. In addition, we note that agents stock up on spirits inventories in anticipation of a tax hike during January-March 2016, which resulted in strong sales number for ThaiBev in 2Q16. We expect a similar restocking phase by agents given that the new excise tax is scheduled to be implemented in September 2017," RHB noted.