Milk could be hangover cure for ThaiBev

THE beer high is fading.

A dramatic rally in the first nine months of 2016 had lifted Thai Beverage (ThaiBev) to become one of the best performing stocks in Singapore's Straits Times Index.

But with the death of a revered monarch and a year-long mourning period dampening the mood, as well as the launch of a new beer brand by rival Boon Rawd Brewery, the much-hyped Chang beer revival may not be as spectacular as investors have hoped.

The Singapore-listed Thai alcohol giant is now stumbling back towards its old levels. In recent days, volumes picked up. On Tuesday, a wave of selling forced the counter to close at S$0.83, an eight-month low.

It is unclear if the stock has found a bottom. Valuations look fair to unattractive. To understand why this is so, we …