Growing consumer confidence could bolster ThaiBev
Consumption volume for alcohol products could soon recover.
ThaiBev could reap the benefits from the rising consumer confidence in Thailand, UOB Kay Hian (UOBKH) said.
According to the University of the Thai Chamber of Commerce (UTCC), the consumer confidence index climbed to 83.2 in August from 80.1 in May, making the index reach its five-year high due to the rising exports, tourism, and farm prices in produce such as fruits, corn, and tapioca.
“Although we are cautious of the near-term impact, we expect consumption volume for alcohol products to recover in the mid-term,” the research firm said.
In Q3, the firm's earnings in the spirit business crashed 15.6% to $166.09m due to lower sales revenue. Overall profit plunged 61% YoY to $247.72m.
UOBKH believes that the rising consumer confidence in Thailand will likely spread further towards rural communities with rising agriculture exports paired with the election slated by February.
They added that ThaiBev could look towards cost savings from its newly integrated business units including Sabeco and Myanmar Spirits.
“We remain positive on the group’s ability to turn around underperforming business segments, as well as a renewed management focus into the beer business segment,” UOBKH said.
In September, ThaiBev added two new senior positions to its management appointments that were filled by internal personnel as they push to increase value creation and business benefits.