[SAB/BUY/TP: VND 73,900] - Dawn after the night


Update recommendation BUY, target price at VND 73,900

Saigon Beer-Alcohol-Beverage Corporation (HOSE: SAB) is the second largest beer producer in Vietnam with a market share of 34%. SAB leads in the number of breweries (26 breweries) with a capacity of 2.4 billion liters/year, providing from mid-priced to premium products. We expect (1) beer consumption to improve in 2024 thanks to the return of major football tournaments (Asian Cup, Euro 2024, Copa America) and adaptation and conversion of consumption habits from on-trade to off-trade as Decree 100/2019/NĐ-CP on fines for alcohol concentration violations continues to be enforced more strictly, (2) with strong financial position, SBT continues to maintain a stable dividend. Based on the FCFF and PE methods, we update the target price of SAB at VND 73,900. We adjust the target price down due to the company's 1:1 stock dividend on September 14, 2023, and decreasing NPAT estimates due to caution in forecasting beer consumption after the tightening of regulations on drinking and driving.

SAB-Saigon Beer - Alcohol - Beverage Corporation
Vo Thi Thuy Trang

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