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Brokers' take: ThaiBev earns 'buy' rating from DBS, OCBC on FY17 results

MAINBOARD-LISTED beverage company Thai Beverage (ThaiBev) has been given a "buy" rating by DBS Equity Research and OCBC Investment Research, following the announcement of its fourth quarter results on Thursday.

DBS Equity Research said in a note on Friday that ThaiBev's results were "within expectations" - ThaiBev's FY17 headline net profit surged 82 per cent year-on-year to 34.5 billion baht (S$1.4 billion), partly due to one-off fair value gains of 8.5 billion baht that were recognised by its associate F&N for its investment in Vinamilk.

"Excluding this and comparing on a similar 12-month period for FY16, core net profit was up by 4.6 per cent year-on-year to 26 billion baht, which is within our expectations. This was despite a relatively slow first nine months due to the mourning period in Thailand."

OCBC Investment Research said that ThaiBev ended FY17 with a "decent set of results" that came in broadly within its expectations, amid a weaker consumer environment as promotional activities were postponed due to the mourning period in Thailand.

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"Excluding F&N recognition of fair value gains, ThaiBev's FY17 core Patmi (profit after tax and minority interest) grew 4.3 per cent year-on-year to 26 billion baht, forming 96 per cent of our FY17 estimate. ThaiBev also increased its full-year dividend payout from 0.6 baht per share to 0.67 baht per share."

DBS Equity Research reiterated a "buy" recommendation on ThaiBev with a target price of S$1.07, noting that the stock remains as "one of its large cap top picks in the consumer sector", and that it expects ThaiBev's performance to improve on the back of a recovery in consumption.

OCBC Investment Research maintained a "buy" recommendation on ThaiBev, but said that its S$1.07 fair value is under review.

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