ThaiBev-backed brewer Sabeco sees market cap down $1 bln after two months

Top Vietnamese brewer Sabeco, where Thai beverage giant ThaiBev holds a 64% stake, has witnessed its market capitalization down by VND23.4 trillion (nearly $1 billion) in the last two months to about VND100 trillion ($4.26 billion).

The SAB share price of the Ho Chi Minh City-headquartered brewer hit VND155,500 ($6.6) at Friday's close, the lowest since mid-July 2022.

Sabeco holds about 40% of the Vietnamese beer market. It recorded an after-tax profit of over VND1 trillion ($42.8 million) in the first quarter of this year on net revenue of VND6.21 trillion ($264.93 million), down 15% year-on-year.

The brewer attributed the underperformance to low demand amid the global slowdown and high penalties for drunk driving.

As of March 31, 2023, its total assets had reached VND34.47 trillion ($1.47 billion), up 13% compared to the beginning of the year. Of which, cash and deposits were more than VND20.36 trillion ($867.67 million), accounting for nearly 65% of the total.

In 2023, Sabeco has set a net revenue target of VND40.27 trillion ($1.72 million) and a post-tax profit goal of VND5.78 trillion ($246.2 million), up 15.1% and 5% year-on-year, respectively.

As part of its long-term plan, in 2023, Sabeco is looking to increase its ownership to a majority stake in Saigon Binh Tay Beer Group JSC, which operates six beer plants and two packaging factories.

Sabeco has also been in the process of raising its ownership in the Western-Saigon Beer JSC from 51% to more than 70%. These moves will help Sabeco improve cost and operational efficiency and expand its product portfolio.

Sub-premium beer consumption will continue to grow, Sabeco highlighted. However, demand is shifting to lower segments due to incomes being impacted by the lingering Covid-19 pandemic, it said.

For 2023, Sabeco will focus its resources on branding and marketing activities, including developing strategies on brands, production, and distribution. The company will debut new drinks, and apply 4.0 technologies in its business and governance activities.

Sabeco operates 26 breweries and 11 trading subsidiaries while running a distribution network consisting of hundreds of thousands of retailers nationwide. Its most popular brands in Vietnam are Lac Viet, Saigon Chill, 333, Saigon Special, Saigon Export, Saigon Lager, and Saigon Gold.

Thailand's ThaiBev spent almost $5 billion buying a 51% stake in Sabeco in December 2017. Its current holding is 64%.