Tuesday, 11 September 2018

World Cheapest Alcohol Stock- Thai Beverage

Thai Beverage PCL has earned the title of the world’s ‘’cheapest alcohol" Blue Chip Stock. The name was awarded by Goldman Sachs and and predicted to turnaround in its operations next year will give the stock a good rise by senior analyst of Goldman.

ThaiBev (SGX: Y92) categorized under undervalued stock Singapore which is one of the largest beverage company in Southeast Asia with distilleries in Thailand, Scotland, and China.  Listed on the Singapore Stock Exchange, ThaiBev has a market capitalization in excess of US$4 billion.

After losing $6.9 billion this year, ThaiBev now trades at 15.3 times of future earnings, below its 10-year average, while the MSCI World Beverages Index trades at 19.9 times.

According to the Goldman analyst report the stock has reached its bottom, both on earnings and valuation. Shares of ThaiBev closed 4% higher, the biggest gain in almost two months on higher than the three-month average volume.

The company management expect the higher agricultural income in Thailand and a strategy to replace short-term debt with long-term loans will improve finances next year.

According to Goldman’s Zhu rating on stock, the investors should observe the company’s progress on sales volume, revenue growth at its Vietnamese unit, cost controls and debt management. Even the target price is decreased to $0.74 from $0.94 last week, citing a lack of visibility in the next six months.

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