Citing the latest consumer confidence survey in Thailand, the index recovered in May to 50.2 points - the highest level since the outbreak.

"The promising recovery was driven by the growth in tourism and the demand for industrial and agricultural goods," says KGI in its July 5 note.

Thai Beverage sells both alcoholic and non-alcoholic beverages.

From the perspective of KGI, recent election results is likely to be favourable to Thai Bev.

The Move Forward Party, winner of the most seats, is known to oppose the existing strict liquor law which is viewed as preserving a duopoly by suppressing microbreweries and distilleries.

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Together with Rawd Brewery, which sells Singha beer, and Thai Bev, which is behind Chang beer, these two companies have a combined 94% market share of the local beer market.

"Though it is possible for the new government to ease the production curb, the dominance of the two giants will remain unchanged in the near term as their economy of scale can maintain stable profit margins amidst a high inflation environment," says KGI.

The brokerage expects revenue for the coming 2QFY2023 to be up 2% y-o-y to THB67.4 billion and for earnings to be up 3% y-o-y to THB 7.4 billion, thanks to a slight improvement in margins.

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