I just stumble on these 2 reports on ThaiBeverage. Anyone has any clue on this stock and if it's worth investing now. Thanks.
1. Thai Beverage: Religare note that ThaiBev and TCC Assets now look like winners, after the two said they would be voting in favor of Heineken's bid for F&N's holdings in APB. Houseestimates after the APB deal, ThaiBev could make around $2b net-net, a whopping 46% cash return on its investments, helping its balance sheet. TCC now needs to come up with around $8.8b to take over F&N and will receive around $5.4b from the APB sale. House won't be surprised if several mths later ThaiBev and Heineken come up with another distribution agreement for ThaiBev products. The "worst-case" scenario for the Thai group is to remain majority F&N stakeholders without being able to delist F&N, if the SG co's board rejects its bid. ThaiBev holding 29.99%, TCC about 1% and Kirin owning 14% is "still a messy structure, but ThaiBev and TCC could get control of F&N with ThaiBev focusing on FNH and TCC on property without having to bring S$8.8b. With Thailand to join the Asean trading link next mth in Oct, Thai retail investors may finally get the opportunity to own Thai Bev -- their own local consumer play. Thai Bev is currently only listed in Singapore. The potential for a new segment of investor class to support Thai Bev may give the recent momentum more legs to run.
2. 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&Nâs prized asset, its loss is not a negative. Argue that the beverage business is equally valuable and complements Thai Bevâs 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.
ThaiBev is pushing now @40.5cts, with lots of accumulation. Don't think FNN management would approve the takeover and ThBev will sit on $2b hard profit, case closed. Even if they approve the takeover even at above 8.88 price, the property business in FNN would have more than compensated for this takeover price paid by ThBev, esp considering the QE3 environment where value of property and commodities are expected to chionk. Also analysts value FNN above 10.80 last week. This is quick money and good luck to all.
Dun seemed to hv any support here but just to say that I'm taking profit at 42.5 cts, alredi >15%. Too much sellers @ 43 cts & beyond. Good luck to all.
