$THAI BEVERAGE PUBLIC CO LTD(Y92.SI)$

Thai Beverage – BUY (Llelleythan Tan)

• Complete removal of COVID-19 tests. Shortly after scrapping the need for a negative pre-departure PCR test in Apr 22, Thailand eliminated on-arrival testing for all vaccinated travellers from 1 May 22 onwards. The minimum insurance coverage required was also further reduced from US$20,000 to US$10,000. In Vietnam, the country has fully reopened its international borders since 15 Mar 22, with only one negative PCR (72 hours predeparture) or ART test (24 hours pre-departure/upon arrival) required before entering the country quarantine-free.

• Transition to endemic living. With the removal of the “Test & Go” Scheme starting 1 May 22, the cancellation of the “Thailand Pass” registration scheme is expected to take place next on 1 Jun 22, streamlining the travel process for international travellers. Thailand’s authorities announced plans to debate allowing the kingdom’s nightlife industry to reopen fully and legally which would lead to a revival in the country’s bustling nightlife and alcohol consumption volumes.

• Recent 1HFY22 core earnings were above expectations with revenue up 9% yoy and core PATMI growing 13% yoy, forming 57.2% and 56.1% of our full-year estimates respectively. The company declared a similar interim dividend of Bt0.15 per share (1HFY21: Bt0.15), representing a 1HFY22 earnings payout ratio of 23.1%. The strong 1HFY22 outperformance was largely driven by a robust 2QFY22, with strong yoy contributions from the beer, non-alcoholic beverages (NAB) and food segments, backed by the full reopening of Thailand’s international borders as well as the easing of social distancing measures. Maintain BUY with an SOTP-based target price of S$1.05.

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• Events: a) BeerCo IPO, and b) potential spin-off listing, and c) full reopening of bars in Vietnam and Thailand.

• Timeline: 6+ months.