ANALYSTS have trimmed their target prices on Thai Beverage : Y92 0%after factoring in its higher marketing spend.

On Friday (Nov 24), DBS Group Research pegged the target price on the food-and-beverage company at S$0.72, just days after cutting it to S$0.75 from S$0.86.

This came after it revised its forecasts on the back of higher advertising and promotional spending, mitigated partially by higher interest income.

RHB cut its target price to S$0.82 from S$0.87, having also lowered its revenue forecasts for FY2024 and FY2025 to factor in softer revenue for ThaiBev’s beer unit and higher branding and marketing commitment. 

Meanwhile, Phillip Securities lowered its target to S$0.67 from S$0.75 after reducing its FY2024 forecasts for net profit by nine percentage points. 

All these research teams maintained “buy” on the counter and assessed ThaiBev’s valuations to be attractive.

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Looking ahead, DBS expects the company’s top line to grow by 5.8 per cent in FY2024, and by 5.7 per cent in FY2025. Its bottom line is projected to grow by 9.9 per cent in FY2024, and by 8 per cent in FY2025, from a low base in FY2023 due to a weak economy.

ThaiBev is a beneficiary of any economic recovery in Thailand and Vietnam, where it has strong market leadership, RHB noted. It believes earnings will grow by 5 to 7 per cent year on year, on the back of higher sales volumes. 

“We expect its earnings growth to be driven by better sales next year, premised on an anticipated consumption recovery in Thailand and Vietnam,” the research team said.

Phillip Securities expects more aggressive fiscal spending in Thailand next year, which will support consumption spending. However, the emergence of Carabao as a new beer competitor could raise price and marketing intensity. 

ThaiBev owns and distributes brands, including Chang Beer.

Phillip Securities said: “Beer is facing soft consumer demand in Vietnam due to the weak economic conditions, and made worse by five cumulative rounds of price increases since 2021.”

It expects growth in spirits revenue from the normalisation of volumes of white spirits, price increases and a higher mix of brown spirits.

Shares of ThaiBev closed 0.9 per cent or S$0.005 lower at S$0.53 on Friday.