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Broker's take: DBS maintains 'buy' on ThaiBev's Myanmar venture

DBS Group Research maintains its "buy" call on ThaiBev's entry into the Myanmar market, continuing with its previous 12-month target price of S$1.07 with a 13 per cent upside, it said in a research note.

ThaiBev announced that it has acquired, through its subsidiary International Beverage Holdings (Singapore), an aggregate 75 per cent stake in Myanmar Supply Chain and Service (MSC), Myanmar Distillery (MDC) and other related businesses at a value of US$742 million.

Since it last bought a stake in beverage maker F&N in 2012, ThaiBev seems to be in acquisition mode again with the recent purchase of a KFC franchise.

ThaiBev's shares have been relatively flat, DBS says, due to the mourning period in Thailand, but is expected to pick up after October and into 2018.

In its note, DBS says the Myanmar spirits market is estimated to grow by a five-year CAGR (compound annual growth rate) of 7.6 per cent from 2012 to 2017 and reach a total volume of 20.1 million litres in 2017, or a per-capita consumption of 0.4 litre.

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Both MSC and MDC operate two production facilities involved in the distillery, blending and bottling plants in Yangon and Mandalay under the Grand Royal spirit brand, the biggest and No 1 whisky brand in Myanmar.

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