ThaiBev profits to rise 16% in FY19: analyst

Q4 profits are tipped to rise 20% YoY.

ThaiBev is in for a big toast as the company's full-year net profit is expected to rise 16% YoY to $1.10b (THB24.4b) in FY 2019 as strong liquor consumption volumes lend support to its domestic alcohol spirit and beer volume which are tipped to grow 7% and 6% respectively, according to a report from CGS-CIMB. The volumes of SABECO, its Vietnamese subsidiary, is also expected to grow around 50% YoY for FY19.

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In Q4, profit is expected to grow 20% YoY to $203.38m (THB 4.5b). On a QoQ basis, however, earnings may fall 30% due to the time period's seasonal weakness. 

"We are positive on the stabilised domestic consumption environment in Thailand and optimistic the upcoming government measures may have spill-over benefits on farm incomes. M&As and improvements in SABECO’s operations are medium-term drivers," analyst Cezzane See said in a report. 

Thailand’s domestic beer volumes rose 9% YoY for the first eight months of 2019 and select Thai spirit volumes rose 8.5%. "We think this could be due to ongoing positive stimulus measures by the Thai government, which prompted the recovery from a low base in CY18," added See. 

Farm income also rose 3.3% yoy in August amidst higher agricultural prices especially pork and chicken. "According to our Thai analysts, prices of other major crops (plain rice, rubber and palm oil) could have bottomed and consumer spending in upcountry could recover in 1QCY20F," added See.