Singapore: Thai Beverage prepares its Singapore S$1.76 billion initial public offering
Thailand's leading liquor and beer company, Thai Beverage, is expected to launch its initial public offering in Singapore next week, Channel NewsAsia informed on May 11.
The IPO is estimated to be worth as much as S$1.76 billion.
But observers of Asia's beer markets say the new kid on the block is not about to upstage Singapore's only listed beer company, Asia Pacific Breweries.
Asia Pacific Breweries, the brewer of Tiger and Anchor beers, has been making significant inroads into regional markets from its home-base in Singapore.
This strategy is expected to give it a leg-up when it faces off with Thai Beverage if it floats on the Singapore Exchange.
Said Gabriel Yap, senior dealing director, Phillip Securities, "Most investors and fund managers would look at Thai Beverage as a direct consumption play into Thailand, whereas the view on AP Breweries has always been, it's an Asian play into the various brewery markets in certain parts of Asia."
Industry watchers say Asia Pacific Breweries now has key interests in beer markets such as Vietnam, Cambodia, and New Zealand.
And in five years, APB is expected to gain a strong foothold in the Chinese and Indian beer markets as well.
Some analysts think such a diverse market will boost APB's status as a premium brewer, even with competition for investor's funds in Singapore.
Said Mr Yap, "Somehow the market has always viewed APB as a higher risk because of its sporadic positions in the various countries itself, unlike for example, a very specific China play like Tsingtao Brewery or Yangjing Jiu or (Korea's) Hite Beer. So in this respect, it may actually help and bring greater attention to APB itself."
Beer companies across the region have been trading between 16 and 32 times their earnings.
Carlsberg Brewery Malaysia is valued at about 20 times its projected earnings, while Asia Pacific Breweries is trading at 18 times.
This compares to industry profit forecasts of between 13 and 18 times for Thai Beverage.
Some observers say Asia Pacific Breweries' low trading volume might give Thai Beverage an edge during its initial public offering.
But the general consensus is that the Thai company's limited regional reach and therefore earnings potential might make the potential stock a little flat in the long run.
Still, according to some analysts, Thai Beverage's dominant position in its home market is seen as a plus for investors bullish on Thailand's economy. - CNA /ct
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