ThaiBev + Sabeco

2 years ago JCprojectfreedom 0

Recently, the share price of Thai Beverage dropped from 0.97 to 0.935 within 2 days. 

Vietnam Beverage wins 53.6% of Vietnam’s largest brewer Saigon Beer Alcohol Beverage Corp (Sabeco). ThaiBev paid 109.97 trillion dong (S$6.5 billion or Thb 158 bn ) and through indirectly owned Vietnam Beverage will own 26.3% in Sabeco.

From previous post, Net Interest Bearing Debt to Equity Ratio 0.23 times in September FY17 will be increased to 1.5 times for FY 2018 after consolidating Sabeco, KFC Thailand and Myanmar Distillery acquisitions.  

JCProjectFreedom Enterprise Value of ThaiBev

The positives
1) Complete story of market acquisition – move strongly into Vietnam market
2) On its journey to fulfill its vision 2020 – Top company in F&B

The negatives
1) Overpaid for the acquisition 
2) Take on a lot of debt through all these acquisitions

Short-term wise, the market will continue to over-react, I believe the share price will test 0.91, follow by 0.89. 

All these price range provides buying opportunities.