SGX-listed Thai Beverage Public Company Limited or ThaiBev (SG:Y92) yesterday announced an investment plan worth 7 billion baht to expand its business. The company said it will invest 4 billion baht in the construction of a new beverage factory in Cambodia, with a further 3 billion baht earmarked for logistics facilities, a biogas plant and other projects.
Tybev stock fell 1.82% on Thursday. The company's shares have traded around 20% since the beginning of the year, due to weak demand and rising costs that have squeezed profits.
Thai Beverage is Thailand's leading beverage company with a significant presence in the Southeast Asia region. The company offers a wide range of both alcoholic and non-alcoholic beverages, along with certain food items.
road ahead
The company's expansion plans include diversifying its market presence, expanding its product portfolio, and responding to evolving consumer demands. The company emphasized that it is working to strengthen its brand and strengthen its competitiveness in anticipation of the revival of the tourism and restaurant industries.
Based on this plan, the company is building Cambodia's first beer production factory, which is scheduled to be completed within two years. The new facility has a production capacity of 50 million hectoliters per year. With the establishment of the new brewery, the company aims to capture a 10% market share for its own brand “Chang Beer” within the premium beer segment in the long term.
The company also revealed that it plans to invest between 800 million baht and 1 billion baht in expanding its food business this fiscal year (FY2023), with particular emphasis on KFC and Oishi. The company aims to open 50 to 60 new stores within the same period.
What are the predictions for Thai beverages?
Despite some weaknesses in the company's Q3 2023 results, analysts remain optimistic about expected consumption recovery in FY2024, along with cost reductions. Analysts believe the company's strong presence in the Thai market, prospects for recovery in Vietnam and attractive valuation make it a compelling investment.
According to TipRanks consensus, the Y92 stock has a Strong Buy rating with all 4 analysts' Buy recommendations. ThaiBev's stock price estimate is S$0.84, indicating an increase of 52.14% in the stock price.
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