SINGAPORE (Nov 16): OCBC is maintaining its “buy” call on Thai Beverage with an unchanged fair value of 83 cents. Although some concerns remain for Thailand’s economy, OCBC says the group’s alcoholic portfolio is quite defensive.  

In a report out on Friday, lead analyst Jodie Foo says Thai Beverage’s 3Q15 results came in broadly in line with OCBC’s expectations.

The group’s PATMI of THB8 billion, which made up 34% of our full-year estimate, was helped by a THB3.8 billion gain from F&N’s disposal of Myanmar Brewery Limited.

“Taking this out, estimated core PATMI of THB4.2 billion was still within our expectations as 3Q is typically the weakest quarter,” says Foo.

In the difficult macro environment, volume of brown spirits sold showed a slight gain.

In a bid to improve market share, ThaiBev has changed the look of Chang beer from amber to green bottle, and consolidated the existing variants into a single brand, Chang Classic. Still, the group was able to ramp up production and had sold slightly more y-o-y for Sept. However, gross profit margin was lower at 16.7% in 1H due to higher packaging costs. Moreover, while the new beer product’s lower alcohol content should have helped lower costs, a range of factors including the change in bottle impacted GPM.

“While there may not be significant improvement for GPM in the near-term, there could be gains further ahead as management has locked in better prices for their raw materials needs for next year,” says Foo.

Thai Bev is trading flat at 68 cents.