Thai Beverage PLC (SGX: Y92), or ThaiBev, is up roughly 4% over the past month.
The share price is finally showing signs of life after languishing at multi-year lows.
This gives rise to the question: Is this just a blip, or the beginning of a long-overdue catch-up rally?
In this article, we take a closer look at the company and see if the stock is attractive based on current fundamentals or is this rally just another head fake.
Why the Share Price Is Where It Is Today
A reason for ThaiBev’s share price climbing over the past month could be investors getting excited about the possibility of the company listing its spirits business in Thailand.
This move could help ThaiBev unlock value from its spirits portfolio, possibly driving an upward revaluation of its shares.
Over the past year, ThaiBev was met with the perfect storm of evolving taste buds, regional geopolitical shock, and macroeconomic uncertainty, all of which caused a slide in the sales volume of the company’s spirits business.
However, ThaiBev could see a change in its fortunes as conditions improve.
What the Business Is Really Worth
ThaiBev’s business is built on a solid foundation with a dominant share in Thailand and a heavy presence in Vietnam.
Between staple alcohol brands such as Hong Thong and Chang Beer, it has enduring brand loyalty that is hard to disrupt, regardless of a few bad quarters.
The alcoholic beverage maker’s dominance is seen in its financials.
Revenue has climbed at a steady compound annual growth rate (CAGR) of 8.5% over the past five years.
Net income, likewise, has followed suit, albeit at a lower CAGR of 0.7%.
Importantly, profits have flown through to ThaiBev’s cash flows.
For the financial year ending September 2025 (FY2025), operating cash flow rose 20.6% year on year (YoY) to THB 46 billion.
Operating cash flow was 114% of operating profit, highlighting the company’s ability to generate cash from earnings.
Free cash flow also rose 13% YoY to THB 33 billion.
Looking forward, management is hopeful for a gradual recovery and stabilisation of the business, anticipating that aggressive government stimulus packages and tourism incentives will significantly bolster consumer sentiment.
Furthermore, they expect the upcoming national elections to provide a traditional tailwind for the spirits and beer categories, leading to a more favorable performance compared to the previous year.
Balance Sheet and Risk Check
ThaiBev’s net debt to equity ratio stands at a healthy 0.85, supported by a healthy cash balance of THB 43 billion.
Refinancing risk appears to be limited, given the company’s recent debt placement of THB 38 billion in late-2025.
ThaiBev isn’t sweating on its debt.
With the interest coverage ratio at 6.7, the company has plenty of capacity to service its interest payments.
What Needs to Go Right
The real focus for 2026 boils down to a simple question: can management actually get sales volumes growing again for its portfolio of alcoholic beverages?
A more constructive backdrop, such as lower operating costs and a more resilient economy in Thailand and surrounding markets, could boost alcohol sales.
The abovementioned listing of the spirits business in Thailand could also support an upward re-rating in the company’s shares.
With capital expenditures expected to be lower in 2026, which boosts cash flows, ThaiBev could be due for a solid year ahead.
What Could Go Wrong
Should alcohol sales remain muted owing to the continuation of various 2025 headwinds faced by the company, the rally in ThaiBev’s share price could be constrained.
A lack of growth could keep the stock in this range.
Even with a better outlook, that’s a risk you can’t ignore.
Get Smart: A Value Giant Waking Up?
Could the stock stay flat? Absolutely.
Despite surrounding optimism, execution remains the biggest hurdle.
ThaiBev has the brand power and the balance sheet to finally come out of its multi-year rut, but only if management is able to perform.
For investors, ThaiBev is a “wait and see” story that’s finally getting interesting.
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Disclosure: Wilson.H does not own shares in any of the companies mentioned.
