To The Moon

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

The proposed spin off was revived on May 5

Thai Beverage has received its eligibility to list from the Singapore Exchange for the proposed separate listing of its beer subsidiary.

The spin off was first mooted, then put on hold, and then revived on May 5.

“The receipt of the eligibility to list letter is one of the requirements which has to be met in order for ThaiBev to proceed with the proposed spin-off listing,” says ThaiBev on June 15.

BeerCo has three breweries in Thailand as well as an interest in a network of 26 breweries in Vietnam. Its business includes the production, distribution and sales of beer including the Chang and Bia Saigon brands.

The group booked a profit after tax of S$348 million on S$4.7 billion in revenue for the full year ended Sept 30, 2020.

ThaiBev said it sees "significant growth potential" in its beer business. It believes the business could be better-developed with a dedicated board of directors and management team, and with direct access to debt and equity capital markets as a separately-listed entity.

"ThaiBev believes that the BeerCo group's position as one of the leading beer players in South-east Asia and its growth potential offers a distinct and compelling growth story," it said.

Meanwhile ThaiBev could use part of the proceeds generated from BeerCo's IPO to reduce debt and strengthen its financial position to invest in future business expansion plans.

ThaiBev is also of the view that its listing of BeerCo will provide a transparent valuation benchmark for BeerCo - allowing the core business of ThaiBev to be assessed and valued more distinctly.

ThaiBev is the cheapest blue chip stock on STI constituents. Buy and Keep for long term. 

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