ThaiBev share price flirted with IPO

Lifetime Membership The last time that I covered ThaiBev share price was in December 2019. That was a long time ago and an SG Wealth Builder Lifetime Member has requested for a coverage on this counter, which has recently plunged into a devastating 11-year low. What on earth has happened to this evergreen Straits Times Index (STI) component?

For background, ThaiBev is Thailand’s largest and leading beverage producer and distributor. Since 2006, ThaiBev has been listed in SGX mainboard and was included in STI in 2016, having replaced IHH Healthcare. In 2013, ThaiBev made waves when the Group, under the leadership of Thai billionaire, Charoen Sirivadhanabhakdi, acquired Singapores’ F&N. Today, ThaiBev has a mighty presence in over 90 countries, with overseas alcoholic production facilities in Scotland, France, Myanmar, Vietnam and China. ThaiBev’s business comprises four segments – spirits, beer, non-alcoholic beverages, and food.

Back in December 2019, ThaiBev share price was actually trading at $0.90. Five years later, the counter has corrected by a whopping 50%, causing plenty of heart pains to many of its faithful investors. However, under the current bear market, the decline of the ThaiBev share price should not be surprising. Apart from local bank stocks, the rest of the STI components, including the S-REITs, are pretty much in bad shape due to the high interest rate environment.

With a 5-year Beta of 1.21, ThaiBev share price is volatile as the decline in ThaiBev share price has not been linear, punctuated with various ups and downs. The counter was razed to the ground in October 2020 when the global equities went into meltdown due to rising COVID-19 cases and the US Presidential Election. Despite these challenges, ThaiBev share price managed to stage a magnificent rebound from the lows to hit a high of $0.83 in January 2021.

However, Man proposes, God disposes. The wheels came off the wagon in 2021 as ThaiBev share price unexpectedly turned bearish as the strict lockdowns in Thailand and Vietnam combined to hurt its alcohol business. Revenue for FY2021 plunged to 240 billion Baht, the lowest from 2019 to 2023. Although COVID-19 started to wane in 2022, formidable challenges emerged to derail recovery for ThaiBev’s business – rising inflation posed by supply chain disruptions and the interest rate hikes by US Federal Reserves.

The interest rate hikes by US Federal Reserves, in particular, hurt market sentiments and walloped global stock markets as companies are saddled with increased interest expenses. ThaiBev share price is not spared from the rout, having not see light at end of the tunnel since the start of the interest rate hikes in 2022. Given that US Federal Reserves is expected to start cutting interest rates in the latter part of 2024, what is the outlook for ThaiBev share price in the coming months?Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in this counter before. Whether ThaiBev share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

Catalyst for ThaiBev share price

One of things I like about US and Hong Kong listed stocks is that the management would often conduct shares buybacks to shore up investors’ confidence in the stock. For SGX stocks, this is often not the case, and ThaiBev is no exception. A check through the SGX filings indicated that there were no shares buybacks all the way since 2019. Prior to that, I also could not recall the last time that ThaiBev bought back its own shares. Hence, existing investors should not expect the management to conduct a shares buyback to restore confidence in ThaiBev share price.

In my opinion, the biggest catalyst for ThaiBev share price must be the [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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