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Devastating crash of ThaiBev share price

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In the good old days, it was considered to be prestigious for a listed company to join the Straits Times Index (STI). It still is. But nowadays, it seems that being in the local benchmark index carries the unwelcome added risk of being prime target for short-selling attacks. Many components of STI had a torrid run so far this year. ThaiBev share price is no exception.

But is short-selling attacks the real culprit for the devastating fall of ThaiBev share price? I honestly doubt so.

In this article, I will share my perspective on the key reason behind the meltdown of ThaiBev share price and also explain why the current price level may represent a good window of opportunity for investors to accumulate ThaiBev shares on the cheap.

Currently trading at dividend yield of 4.12% and Price/Book Value of 3.03, ThaiBev share price may seem attractive for investors seeking yield. But then again, I view ThaiBev more of a growth stock, rather than a dividend counter. In this regard, I feel investors should have a strategy of setting the appropriate entry level and aim instead for capital appreciation.

The message I am putting across is that there would be pocket of opportunities for investors to make money out of the ThaiBev share price volatility.

ThaiBev share price

ThaiBev profile

Although ThaiBev’s business is concentrated in Thailand, it may be a mistake to think that this SGX mainboard-listed company’s growth focus is limited to Thailand. The founder of Thaibev, Charoen Sirivadhanabhakdi, signalled his ambition to build the largest F&B empire in South-East Asia when he conquered Singapore’s 100 year-old F&N back in 2013. The stunning takeover of F&N means that ThaiBev is an exciting long-term Pan-Asia project and investors must adopt the right strategy to make money out of this counter.

Listed on SGX in 2006 at IPO price of $0.28, ThaiBev took the local stock market by storm with the acquisition of F&N. The shock move saw it joining the elite STI in 2013, knocking off IHH Healthcare from the perch. Since then, ThaiBev share price never looked back, going from strength to strength to reach a peak of $1.03 in 2016.

Then in 2017, ThaiBev completed four acquisitions which propelled ThaiBev share price. The acquisitions included 76% shareholding interest in Spice of Asia Co.,Ltd. (SOA) to operate 10 stores of restaurants serving hotpot and Thai food; 75% shareholding interest in Myanmar Supply Chain and Marketing Services Co.,Ltd. and Myanmar Distillery Co.,Ltd. (MSC & MDC) to operate spirits business in Myanmar; 252 existing KFC stores in Thailand by The QSR of Asia Co.,Ltd. (QSA) and a 53.59% shareholding interest in Saigon Beer – Alcohol – Beverage Joint Stock Corporation (Sabeco), a company incorporated in The Socialist Republic of Vietnam.

Against the backdrop of these acquisitions, it certainly seemed that the sky is the limit for ThaiBev share price. Who could have predicted on what is to come for ThaiBev share price?

The turning point

Things took on an ominous turn in late December 2017, when ThaiBev share price turned bearish and started [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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Updated: September 14, 2018 — 3:28 pm

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