Improving agriculture prices and farm income could bolster ThaiBev's earnings

Thailand is seeing signs of consumption recovery.

ThaiBev could get a rebound due to improving agricultural prices and farm income amidst its weak overall domestic consumption, DBS Equity Research said.

“Though we believe the recent uptick in farm income could lead to sequential recovery, we are cognizant of the market’s skepticism and await firmer confirmation from tangible results,” the firm explained.

In the long run, DBS thinks that the group has a bright potential as it evolves into becoming a regional beverage player. However, they note that ThaiBev’s share price could remain volatile due to its weak domestic consumption.

Moreover, DBS mentioned that the beverage firm could benefit with stronger sales as Thailand sees signs of consumption recovery. In addition, DBS also notes that the firm could be uplifted through its plans to extract potential synergies arising from recent acquisitions, which could seal the growth of earnings per share (EPS).

Also read: ThaiBev's Q3 profit plunged 61% to $247.72m

Crippling market conditions continued to weigh down on ThaiBev after profit plunged by 61% YoY to $247.72m (THB5.99b) in Q3, according to its financial statement.

Earnings in the spirit business fell 15.6% to $166.09m (THB4,016m) on the back of lower sales revenue whilst earnings from the non-alcoholic beverages segment also crashed 33% to $11.82m (THB$286m).