Brokers' take

ThaiBev > Buy (maintained) RHB Research Institute, Jan 18 Jan 18 close: S$0.71 Target price: S$0.85

DUE to a loan restructuring, ThaiBev now effectively owns 53 per cent of Sabeco, the largest brewery in Vietnam. We believe this move is positive to the group in the long run as ThaiBev will have greater control of the business, allowing it to reduce Sabeco's cost structure and increase efficiencies. This, however, slightly dampens near-term earnings, due to the absence of interest charged to Vietnam Bev after the loan restructuring.

While ThaiBev was one of the worst-performing stocks in Singapore last year, we believe the worst is over with beer production levels in Thailand bucking the negative growth trend, up 10.5 per cent in October and 11.2 per cent in November last year.