Maybank Kim Eng has become the latest brokerage to track Thai Beverage closely.

The brokerage has started coverage on the alcohol manufacturer with a “buy” rating and target price of 95 cents.

“We believe ThaiBev’s portfolio of top brands is well-poised to capture post-Covid-19 recovery, driven by easing restrictions of on-premises consumption,” Maybank KE analyst Kareen Chan writes in a March 28 report.

According to Maybank KE, the company’s beer business is positioned for margin expansion owing to positive operating leverage.

The potential listing of ThaiBev’s beer business is a near-term catalyst, it adds.

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SEE:Analysts more bullish on ThaiBev despite weak FY2020 results

The beer business, it says, could potentially be valued at $10 billion and could lift its target price for the stock by 30% to $1.24.

For now, the brokerage notes that the stock is undervalued.

The counter is currently trading at about 15.1 times its FY2021 forecast earnings, which is one standard deviation below its historical average and 65% discount to its global peers’ average of 45 times.

“We believe this is unjustified for one of the top alcohol market leaders in Thailand and Vietnam, coupled with its growth prospects,” says Chan.

As at 12.43 pm, ThaiBev was up 1 cent or 1.4% at 75 cents with 10.8 million shares changed hands.