Thai Bev

Thai Bev: CIMB reiterates Outperform with TP $0.74 (from $0.75). Notes recent fears that the impact of an excise tax increase and a cut in rice subsidies on farmers’ incomes will affect Thai Bev’s spirits business are unfounded. Rice farmers constitute a small portion of the white spirits customer base and any drop in volumes from tax hikes is temporal. Believes revenues will still increase this year because higher ASPs will compensate for any fall in volumes. Says, at the end of the day, spirits revenue has never had a down year in the past decade. Thai Bev enjoys an effective monopoly and consumers eventually return because they have little other choice. Tips additional catalyst to come from potential corporate restructuring.