Following Thai Beverage’s (ThaiBev) 9M FY20 business update, most analysts are positive on the company despite the impact from the restrictions to curb the spread of the novel coronavirus (Covid-19).

CGS-CIMB Research, however, is not one of them.

The brokerage believes that lower earnings before interest, tax, depreciation and amortisation (Ebitda) recorded by Fraser and Neave (F&N) and Frasers Property in the same period may indicate lower earnings registered by both associate companies.

This could negatively impact ThaiBev’s earnings, it warns.

CGS-CIMB has reiterated its “hold” call for the stock with an unchanged target price of 70 cents.

“Lower associate earnings could have led to net profit shrinking in line with our expectations,” CGS-CIMB analyst Cezzane See writes in a note dated Aug 15.

According to KGI Securities, ThaiBev is trading at favourable valuations considering its market share and current earnings multiples are below the five-year average.

The brokerage also notes that the company is “well-positioned” given that its key markets are ranked among the top alcohol consuming countries in Asia.

Moreover, the listing of its beer business remains a possibility and a key re-rating catalyst, it says.

KGI has maintained its “outperform” rating for the stock albeit with a lower target price of 93 cents.

“We remain positive on ThaiBev’s long term fundamentals and dominant market share in both Thailand and Vietnam,” KGI analyst Joel Ng writes in an Aug 17 report.

DBS Group Research notes that ThaiBev’s 9M FY20 operating results support its earlier thesis is that alcohol consumption should be less impacted vis-à-vis other consumer discretionary spending.

The brokerage has maintained its FY20 revenue and earnings forecasts, which project a contraction of 8% and 6%, respectively.

It has also kept its “buy” recommendation for the stock with an unchanged target price of 90 cents.

“Drop in 3Q FY20 revenue not as dire as expected; market worries unfounded and shows resiliency of consumption,” DBS analysts Andy Sim and Alfie Yeo write in a note dated Aug 17.

Meanwhile, RHB Securities has highlighted that the earnings contributions from the company’s beer and food segments, though severely impacted by Covid-19 and the resulted movement restrictions, were not as significant as the spirits segment.

The spirits segment contributed about 80% of the company’s profit after tax and minority interest in FY19, it notes.

“We expect earnings to remain fairly resilient with the spirits segment holding up,” RHB analyst Juliana Cai writes in an Aug 17 report.

RHB has upgraded the stock to a “buy” rating albeit with an unchanged target price of 72 cents.

As at 3.41 pm, ThaiBev was up 4 cents or 6.6% at 64.5 cents with 425.1 million shares traded.