Thai Beverage Public Company Limited (SGX Y92) is a producer of alcoholic and non-alcoholic drinks, among other things. If you are keen to invest in Thai Beverage’s shares, it is critical to know how it brings in its money. Investing in a business without such knowledge is like travelling to a deserted territory without knowing what’s in store and exposing yourself to all kinds of risks.
A foray into Thai Beverage’s businesses
With that, let’s check out what business Thai Beverage is involved in and how it generates its revenue. The following shows the revenue contribution for each of Thai Beverage’s business segments for the financial year ended 30 September 2018 (FY2018):
|Spirits||THB 105.9 billion|
|Beer||THB 94.5 billion|
|Non-alcoholic beverages||THB 16.1 billion|
|Food||THB 13.2 billion|
|Total revenue||THB 229.7 billion|
Source: Thai Beverage Public Company Limited FY2018 annual report
The Spirits segment does the production and sales of branded spirits products and soda. For FY2018, this segment brought in the bulk of total revenue at 46%. Thai Beverage is a leader in the domestic spirits market. According to a survey by International Wine and Spirit Research, Ruang Khao, Thailand’s first white spirits brand, was ranked top in Thailand and second worldwide in terms of sales volume in 2018. Other spirits brands under Thai Beverage’s stable include Mekhong, SangSom, and Old Pulteney.
Next, the Beer segment produces and sells raw materials and branded beer products. Under this segment, the major beer brands are Chang, Archa, Federbräu, and Saigon. Federbräu is the first and only premium beer brand in Thailand made with German single malt. Saigon now comes under Thai Beverage’s umbrella after its purchase of Sabeco, Vietnam’s brewer, at the end of 2017. Thai Beverage said in its annual report that the company and Sabeco “have since started working together in areas such as brand and portfolio review in order to increase sales and improve overall performance”.
Moving on, the Non-Alcoholic Beverage segment is involved in the production and sales of branded water, ready-to-drink coffee, energy drink, green tea, and fruit-flavoured drinks.
And lastly, the Food segment runs restaurants and distributes food and beverages. This segment, as of the end of FY2018, had a total of 268 KFC outlets across Thailand, among other restaurants.
The Foolish bottom line
Thai Beverage owns leading F&B brands such as Chang, Saigon, and KFC. Together with its wide distribution network, it gives Thai Beverage a competitive advantage over its rivals. This should enable the company to continue bringing in growing revenue over the years.
Now that we have understood how Thai Beverage makes money, it would be much easier for readers to dive into other aspects of the company’s business such as its profitability and future growth prospects before investing in its shares.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.
Motley Fool Singapore 2019