Thai Beverage

Thai Beverage: CIMB maintains O/p with $0.60 TP. House note that the issue now is whether Thai Bev/TCC will become a controlling shareholder of F&N for Thai Bev to reap the benefits of an extended beverage distribution network. Do not discount the possibility of a competing bid for F&N even though Heineken is no longer in the picture. Despite 15% appreciation MTD, the share price is still 42% below house TP of $0.60 SOP. Maintain Outperform with lower estimates as it is now highly probable that APB will be sold to Heineken. House also lower dividend payout assumptions. House add that despite APB being F&N’s prized asset, its loss is not a negative. Argue that the beverage business is equally valuable and complements Thai Bev’s fast growing, but domestic, non-alcoholic beverage business. Conclude that the rally should not be one to sell into. The stock remains attractively valued at 15x CY13 P/E. The spirits business alone is worth more than the current share price. As a guide, APB was taken out at 35x P/E.