Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Bottom-Up

<p>In this note, we present our investment view on <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> and stock-upside rationale based on (1) updated Sum-of-the-parts (SOTP) valuation following its quarterly results (December) announced on Feb 11th (2) BeerCo valuation based on updated numbers (3) Quarterly results review. <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)'s</a> reported quarterly results (1QFY21, ending Dec 2020) were close in line to the year-ago quarter (1QFY20), and significantly higher than 2Q-4QFY20 levels, suggesting a bounce-back in revenues and net earnings to pre-COVID levels, especially for its core spirits segment. </p>

In this note, we present our investment view on Thai Beverage (THBEV SP) and stock-upside rationale based on (1) updated Sum-of-the-parts (SOTP) valuation following its quarterly results (December) announced on Feb 11th (2) BeerCo valuation based on updated numbers (3) Quarterly results review. Thai Beverage (THBEV SP)'s reported quarterly results (1QFY21, ending Dec 2020) were close in line to the year-ago quarter (1QFY20), and significantly higher than 2Q-4QFY20 levels, suggesting a bounce-back in revenues and net earnings to pre-COVID levels, especially for its core spirits segment. 

Thai Beverage: Bouncy 1QFY21 Can Fire up the Stock; 20% Upside on SOTP

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

<p><a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> exhibits weakening signals with a needed pullback cycle that sets up a better long entry point. The macro trend remains caught in a descending congestive correction from 2016 with a base needed to clear the all important 0.90 barrier.</p><p>RSI bear divergence warns of a pullback (non confirmation of recent highs). Sell volumes are just starting to pick up off the 0.85 resistance.</p>

Thai Beverage (THBEV SP) exhibits weakening signals with a needed pullback cycle that sets up a better long entry point. The macro trend remains caught in a descending congestive correction from 2016 with a base needed to clear the all important 0.90 barrier.RSI bear divergence warns of a pullback (non confirmation of recent highs). Sell volumes are just starting to pick up off the 0.85 resistance.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<p>BeerCo consists of <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a>'s beer business and operations except for the sale of Thai beer products outside Thailand. ThaiBev aims to conduct a public offering of up to 20% of the total number of issued ordinary shares of BeerCo through an SGX IPO. The IPO could raise as much as $2 billion, according to press reports. </p><p>In <a href="https://www.smartkarma.com/insights/thaibev-s-beerco-ipo-first-look" target="_blank" data-smartkarma-citation="insights:47885" rel="noopener">ThaiBev’s BeerCo IPO: First Look</a>, we noted that BeerCo has attractive fundamentals as it will return to growth driven by the recovery in on-premise consumption as the effect of the COVID-19 pandemic wanes. In <a href="https://www.smartkarma.com/insights/thaibev-s-beerco-ipo-valuation-first-look" target="_blank" data-smartkarma-citation="insights:47927" rel="noopener">ThaiBev’s BeerCo IPO: Valuation First Look</a>, we opined that BeerCo's rumoured valuation of $10 billion can be justified. </p><div class="content-highlight"><p>In this note, we take a close look at the BeerCo's 1QFY2021 results released alongside ThaiBev's 1QFY2021 results. BeerCo’s 1QFY2021 results are mixed as the top-line decline driven by largely one-off factors was accompanied by ongoing margin progression and cash generation. We continue to believe that BeerCo is well-placed to return to growth as the year unfolds due to a gradual recovery in on-premise consumption and undemanding comparable periods. </p></div>

BeerCo consists of Thai Beverage (THBEV SP)'s beer business and operations except for the sale of Thai beer products outside Thailand. ThaiBev aims to conduct a public offering of up to 20% of the total number of issued ordinary shares of BeerCo through an SGX IPO. The IPO could raise as much as $2 billion, according to press reports. In ThaiBev’s BeerCo IPO: First Look, we noted that BeerCo has attractive fundamentals as it will return to growth driven by the recovery in on-premise consumption as the effect of the COVID-19 pandemic wanes. In ThaiBev’s BeerCo IPO: Valuation First Look, we opined that BeerCo's rumoured valuation of $10 billion can be justified. In this note, we take a close look at the BeerCo's 1QFY2021 results released alongside ThaiBev's 1QFY2021 results. BeerCo’s 1QFY2021 results are mixed as the top-line decline driven by largely one-off factors was accompanied by ongoing margin progression and cash generation. We continue to believe that BeerCo is well-placed to return to growth as the year unfolds due to a gradual recovery in on-premise consumption and undemanding comparable periods. 

ThaiBev’s BeerCo Limited IPO: 1Q Results

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<p><a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a>, the number one brewer in the ASEAN region with a capacity of 38.0m hectolitres, released strong 1QFY21 results today with revenue coming in at THB 71.8bn (22.1% QoQ and -5.1% YoY) and EBITDA at THB 14.9bn (26.6% QoQ and 6.3% YoY).</p><p>With the news of the proposed Spin-off Listing of ThaiBev’s beer segment, it will be interesting to watch the market’s reaction to ThaiBev’s strong comeback in 1QFY21, following a drop off in performance due to COVID-19.</p>

Thai Beverage (THBEV SP), the number one brewer in the ASEAN region with a capacity of 38.0m hectolitres, released strong 1QFY21 results today with revenue coming in at THB 71.8bn (22.1% QoQ and -5.1% YoY) and EBITDA at THB 14.9bn (26.6% QoQ and 6.3% YoY).With the news of the proposed Spin-off Listing of ThaiBev’s beer segment, it will be interesting to watch the market’s reaction to ThaiBev’s strong comeback in 1QFY21, following a drop off in performance due to COVID-19.

ThaiBev’s Strong 1QFY21 Results Could Shift Opinions About The BeerCo Spin-Off

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

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<p>This week in StubWorld ...</p>
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<p>Following the <a href="https://links.sgx.com/FileOpen/THBEV_Potential_Spin_Off_Listing_of_BeerCo.ashx?App=Announcement&amp;FileID=647386" target="_blank" rel="noopener">no-objection notice</a> from the SGX concerning its BeerCo IPO, the key focus will be on the appropriate discount <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> will trade to the spun-off entity, and in turn, BeerCo's discount to 53.5%-held <a href="https://www.smartkarma.com/entities/saigon-beer-alcohol-beverage" target="_blank" data-smartkarma-citation="entities:23645:1" rel="noopener">Saigon Beer Alcohol Beverage (SAB VN)</a>. </p>
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<p>Preceding my comments on ThaiBev <em>and </em><a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




Following the no-objection notice from the SGX concerning its BeerCo IPO, the key focus will be on the appropriate discount Thai Beverage (THBEV SP) will trade to the spun-off entity, and in turn, BeerCo's discount to 53.5%-held Saigon Beer Alcohol Beverage (SAB VN). 




Preceding my comments on ThaiBev and PCCW Ltd (8 HK) are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


As always, more below the fold.


StubWorld: Double Stub Via ThaiBev's BeerCo IPO

Singapore

Thai Beverage Public Company Limited produces a wide range of branded beer and spirits in Thailand.

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Thai Beverage (THBEV SP)

Thai Beverage: Bouncy 1QFY21 Can Fire up the Stock; 20% Upside on SOTP

The rationale for 20% upside for Thai Beverage based on updated SOTP valuation, BeerCo valuation, Quarterly results review.

Devi Subhakesan

Thai Beverage Buy in Level

Thai Beverage (THBEV SP) exhibits weaker signals with a needed pullback that sets up a better long entry point at 0.72 and near pocket support. The...

Thomas Schroeder

ThaiBev’s BeerCo Limited IPO: 1Q Results

BeerCo's 1QFY2021 results suggest that it is well-placed to return to growth as the year unfolds due to a gradual recovery in on-premise...

Arun George

ThaiBev’s Strong 1QFY21 Results Could Shift Opinions About The BeerCo Spin-Off

With the news of the proposed Beer Segment Spin-off, it will be interesting to watch the market’s reaction to ThaiBev’s strong comeback in 1QFY21,...

Oshadhi Kumarasiri

StubWorld: Double Stub Via ThaiBev's BeerCo IPO

I estimate minimal upside for ThaiBev here if assuming a 25% discount to NAV. ThaiBev is trading at 16.5x trailing EV/EBITDA, but its forward EV...

David Blennerhassett

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