Thai Bev

Thai Bev: DBSV starts Thai Bev at Buy with TP $0.80. Notes ThaiBev is the entrenched market leader in Thailand's spirits business, providing the group with stable growth and strong cash flow. "It is the market leader in green tea (through Oishi) and has the largest distribution network for soft drinks in Thailand allowing for quick route-to-market" . "ThaiBev has the potential to evolve into a credible regional F&B player over time," with its F&N stake buy a good platform for regional growth. Among near and long term catalysts, DBSV expects F&N's capital distribution will be used toward lowering existing debt, potential collaboration with F&N and restructuring of F&N. Potential inclusion of ThaiBev in the MSCI index at the upcoming May 15 review could also serve as a near-term trading catalyst, it says, noting F&N was recently removed from the index. ThaiBev trades at 16X FY14 prospective earnings, below regional and global peers' 18X-24X average. Despite the counter's strong performance year-to-date, the house believes price appreciation on this counter will continue. The stock is up 5.6% at $0.665.